Correlation Between Tax-managed and Elfun Diversified
Can any of the company-specific risk be diversified away by investing in both Tax-managed and Elfun Diversified at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Tax-managed and Elfun Diversified into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tax Managed Large Cap and Elfun Diversified Fund, you can compare the effects of market volatilities on Tax-managed and Elfun Diversified and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Tax-managed with a short position of Elfun Diversified. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tax-managed and Elfun Diversified.
Diversification Opportunities for Tax-managed and Elfun Diversified
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Tax-managed and Elfun is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Tax Managed Large Cap and Elfun Diversified Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elfun Diversified and Tax-managed is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Tax Managed Large Cap are associated (or correlated) with Elfun Diversified. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Elfun Diversified has no effect on the direction of Tax-managed i.e., Tax-managed and Elfun Diversified go up and down completely randomly.
Pair Corralation between Tax-managed and Elfun Diversified
Assuming the 90 days horizon Tax Managed Large Cap is expected to generate 1.53 times more return on investment than Elfun Diversified. However, Tax-managed is 1.53 times more volatile than Elfun Diversified Fund. It trades about 0.18 of its potential returns per unit of risk. Elfun Diversified Fund is currently generating about 0.25 per unit of risk. If you would invest 8,428 in Tax Managed Large Cap on November 3, 2024 and sell it today you would earn a total of 256.00 from holding Tax Managed Large Cap or generate 3.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tax Managed Large Cap vs. Elfun Diversified Fund
Performance |
| Timeline |
| Tax Managed Large |
| Elfun Diversified |
Tax-managed and Elfun Diversified Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tax-managed and Elfun Diversified
The main advantage of trading using opposite Tax-managed and Elfun Diversified positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tax-managed position performs unexpectedly, Elfun Diversified can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Elfun Diversified will offset losses from the drop in Elfun Diversified's long position.| Tax-managed vs. Small Cap Value Fund | Tax-managed vs. Queens Road Small | Tax-managed vs. Ultrasmall Cap Profund Ultrasmall Cap | Tax-managed vs. Vanguard Small Cap Value |
| Elfun Diversified vs. State Street Target | Elfun Diversified vs. State Street Target | Elfun Diversified vs. Ssga International Stock | Elfun Diversified vs. State Street Target |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Transaction History module to view history of all your transactions and understand their impact on performance.
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