Correlation Between 1919 Financial and Elfun Trusts
Can any of the company-specific risk be diversified away by investing in both 1919 Financial and Elfun Trusts 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 1919 Financial and Elfun Trusts into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between 1919 Financial Services and Elfun Trusts Elfun, you can compare the effects of market volatilities on 1919 Financial and Elfun Trusts 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 1919 Financial with a short position of Elfun Trusts. Check out your portfolio center. Please also check ongoing floating volatility patterns of 1919 Financial and Elfun Trusts.
Diversification Opportunities for 1919 Financial and Elfun Trusts
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between 1919 and Elfun is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding 1919 Financial Services and Elfun Trusts Elfun in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elfun Trusts Elfun and 1919 Financial 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 1919 Financial Services are associated (or correlated) with Elfun Trusts. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Elfun Trusts Elfun has no effect on the direction of 1919 Financial i.e., 1919 Financial and Elfun Trusts go up and down completely randomly.
Pair Corralation between 1919 Financial and Elfun Trusts
Assuming the 90 days horizon 1919 Financial Services is expected to generate 0.41 times more return on investment than Elfun Trusts. However, 1919 Financial Services is 2.44 times less risky than Elfun Trusts. It trades about -0.27 of its potential returns per unit of risk. Elfun Trusts Elfun is currently generating about -0.24 per unit of risk. If you would invest 2,987 in 1919 Financial Services on October 14, 2024 and sell it today you would lose (169.00) from holding 1919 Financial Services or give up 5.66% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
1919 Financial Services vs. Elfun Trusts Elfun
Performance |
| Timeline |
| 1919 Financial Services |
| Elfun Trusts Elfun |
1919 Financial and Elfun Trusts Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with 1919 Financial and Elfun Trusts
The main advantage of trading using opposite 1919 Financial and Elfun Trusts positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 1919 Financial position performs unexpectedly, Elfun Trusts 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 Trusts will offset losses from the drop in Elfun Trusts' long position.| 1919 Financial vs. Delaware Investments Ultrashort | 1919 Financial vs. Angel Oak Ultrashort | 1919 Financial vs. Alpine Ultra Short | 1919 Financial vs. Blackrock Global Longshort |
| Elfun Trusts vs. Gabelli Global Financial | Elfun Trusts vs. Goldman Sachs Financial | Elfun Trusts vs. 1919 Financial Services | Elfun Trusts vs. Putnam Global Financials |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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