Correlation Between Wcm Focused and Elfun Diversified
Can any of the company-specific risk be diversified away by investing in both Wcm Focused 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 Wcm Focused and Elfun Diversified into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wcm Focused Emerging and Elfun Diversified Fund, you can compare the effects of market volatilities on Wcm Focused 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 Wcm Focused with a short position of Elfun Diversified. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wcm Focused and Elfun Diversified.
Diversification Opportunities for Wcm Focused and Elfun Diversified
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Wcm and Elfun is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Wcm Focused Emerging and Elfun Diversified Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elfun Diversified and Wcm Focused 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 Wcm Focused Emerging 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 Wcm Focused i.e., Wcm Focused and Elfun Diversified go up and down completely randomly.
Pair Corralation between Wcm Focused and Elfun Diversified
Assuming the 90 days horizon Wcm Focused Emerging is expected to generate 1.66 times more return on investment than Elfun Diversified. However, Wcm Focused is 1.66 times more volatile than Elfun Diversified Fund. It trades about 0.14 of its potential returns per unit of risk. Elfun Diversified Fund is currently generating about 0.07 per unit of risk. If you would invest 1,267 in Wcm Focused Emerging on November 3, 2024 and sell it today you would earn a total of 233.00 from holding Wcm Focused Emerging or generate 18.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wcm Focused Emerging vs. Elfun Diversified Fund
Performance |
| Timeline |
| Wcm Focused Emerging |
| Elfun Diversified |
Wcm Focused and Elfun Diversified Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wcm Focused and Elfun Diversified
The main advantage of trading using opposite Wcm Focused and Elfun Diversified positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wcm Focused 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.| Wcm Focused vs. Wcm Focused International | Wcm Focused vs. Artisan Developing World | Wcm Focused vs. International Advantage Portfolio | Wcm Focused vs. Causeway Emerging Markets |
| Elfun Diversified vs. Small Cap Value Fund | Elfun Diversified vs. Ab Small Cap | Elfun Diversified vs. Omni Small Cap Value | Elfun Diversified vs. William Blair Small |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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