Correlation Between Us Government and Elfun Government
Can any of the company-specific risk be diversified away by investing in both Us Government 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 Us Government and Elfun Government into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Us Government Securities and Elfun Government Money, you can compare the effects of market volatilities on Us Government 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 Us Government with a short position of Elfun Government. Check out your portfolio center. Please also check ongoing floating volatility patterns of Us Government and Elfun Government.
Diversification Opportunities for Us Government and Elfun Government
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between UGSDX and Elfun is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Us Government Securities 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 Us Government 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 Us Government Securities 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 Us Government i.e., Us Government and Elfun Government go up and down completely randomly.
Pair Corralation between Us Government and Elfun Government
Assuming the 90 days horizon Us Government is expected to generate 63.63 times less return on investment than Elfun Government. But when comparing it to its historical volatility, Us Government Securities is 157.73 times less risky than Elfun Government. It trades about 0.11 of its potential returns per unit of risk. Elfun Government Money is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 95.00 in Elfun Government Money on September 12, 2024 and sell it today you would earn a total of 5.00 from holding Elfun Government Money or generate 5.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 98.51% |
| Values | Daily Returns |
Us Government Securities vs. Elfun Government Money
Performance |
| Timeline |
| Us Government Securities |
| Elfun Government Money |
Us Government and Elfun Government Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Us Government and Elfun Government
The main advantage of trading using opposite Us Government and Elfun Government positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Us Government 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.| Us Government vs. SCOR PK | Us Government vs. Morningstar Unconstrained Allocation | Us Government vs. Via Renewables | Us Government vs. Bondbloxx ETF Trust |
| Elfun Government vs. Vanguard Total Stock | Elfun Government vs. Vanguard 500 Index | Elfun Government vs. Vanguard Total Stock | Elfun Government vs. Vanguard Total Stock |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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