Correlation Between Saat Market and Elfun Diversified
Can any of the company-specific risk be diversified away by investing in both Saat Market 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 Saat Market and Elfun Diversified into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Saat Market Growth and Elfun Diversified Fund, you can compare the effects of market volatilities on Saat Market 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 Saat Market with a short position of Elfun Diversified. Check out your portfolio center. Please also check ongoing floating volatility patterns of Saat Market and Elfun Diversified.
Diversification Opportunities for Saat Market and Elfun Diversified
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Saat and Elfun is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Saat Market Growth and Elfun Diversified Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elfun Diversified and Saat Market 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 Saat Market Growth 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 Saat Market i.e., Saat Market and Elfun Diversified go up and down completely randomly.
Pair Corralation between Saat Market and Elfun Diversified
Assuming the 90 days horizon Saat Market is expected to generate 3.79 times less return on investment than Elfun Diversified. In addition to that, Saat Market is 1.27 times more volatile than Elfun Diversified Fund. It trades about 0.04 of its total potential returns per unit of risk. Elfun Diversified Fund is currently generating about 0.19 per unit of volatility. If you would invest 2,171 in Elfun Diversified Fund on September 14, 2024 and sell it today you would earn a total of 29.00 from holding Elfun Diversified Fund or generate 1.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Saat Market Growth vs. Elfun Diversified Fund
Performance |
| Timeline |
| Saat Market Growth |
| Elfun Diversified |
Saat Market and Elfun Diversified Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Saat Market and Elfun Diversified
The main advantage of trading using opposite Saat Market and Elfun Diversified positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Saat Market 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.| Saat Market vs. Simt Mid Cap | Saat Market vs. Saat Tax Managed Aggressive | Saat Market vs. Sit Emerging Markets | Saat Market vs. Simt High Yield |
| Elfun Diversified vs. Loomis Sayles Inflation | Elfun Diversified vs. Lord Abbett Inflation | Elfun Diversified vs. Goldman Sachs Inflation | Elfun Diversified vs. Ab Bond Inflation |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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