Correlation Between Short Term and Elfun Government
Can any of the company-specific risk be diversified away by investing in both Short Term and Elfun Government 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 Short Term and Elfun Government into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Short Term Government Fund and Elfun Government Money, you can compare the effects of market volatilities on Short Term and Elfun Government 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 Short Term with a short position of Elfun Government. Check out your portfolio center. Please also check ongoing floating volatility patterns of Short Term and Elfun Government.
Diversification Opportunities for Short Term and Elfun Government
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Short and Elfun is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Short Term Government Fund and Elfun Government Money in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elfun Government Money and Short Term 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 Short Term Government Fund are associated (or correlated) with Elfun Government. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Elfun Government Money has no effect on the direction of Short Term i.e., Short Term and Elfun Government go up and down completely randomly.
Pair Corralation between Short Term and Elfun Government
Assuming the 90 days horizon Short Term is expected to generate 1.06 times less return on investment than Elfun Government. But when comparing it to its historical volatility, Short Term Government Fund is 1.46 times less risky than Elfun Government. It trades about 0.09 of its potential returns per unit of risk. Elfun Government Money is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 97.00 in Elfun Government Money on October 20, 2024 and sell it today you would earn a total of 3.00 from holding Elfun Government Money or generate 3.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 97.64% |
| Values | Daily Returns |
Short Term Government Fund vs. Elfun Government Money
Performance |
| Timeline |
| Short Term Government |
| Elfun Government Money |
Short Term and Elfun Government Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Short Term and Elfun Government
The main advantage of trading using opposite Short Term and Elfun Government positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Short Term position performs unexpectedly, Elfun Government 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 Government will offset losses from the drop in Elfun Government's long position.| Short Term vs. Vanguard Energy Index | Short Term vs. Alpsalerian Energy Infrastructure | Short Term vs. Oil Gas Ultrasector | Short Term vs. Transamerica Mlp Energy |
| Elfun Government vs. Fulcrum Diversified Absolute | Elfun Government vs. Delaware Limited Term Diversified | Elfun Government vs. Tax Managed Mid Small | Elfun Government vs. Northern Small Cap |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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