Correlation Between Elfun Diversified and Stone Ridge
Can any of the company-specific risk be diversified away by investing in both Elfun Diversified and Stone Ridge 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 Elfun Diversified and Stone Ridge into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Elfun Diversified Fund and Stone Ridge Diversified, you can compare the effects of market volatilities on Elfun Diversified and Stone Ridge 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 Elfun Diversified with a short position of Stone Ridge. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elfun Diversified and Stone Ridge.
Diversification Opportunities for Elfun Diversified and Stone Ridge
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Elfun and Stone is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Elfun Diversified Fund and Stone Ridge Diversified in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stone Ridge Diversified and Elfun Diversified 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 Elfun Diversified Fund are associated (or correlated) with Stone Ridge. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stone Ridge Diversified has no effect on the direction of Elfun Diversified i.e., Elfun Diversified and Stone Ridge go up and down completely randomly.
Pair Corralation between Elfun Diversified and Stone Ridge
Assuming the 90 days horizon Elfun Diversified Fund is expected to generate 2.32 times more return on investment than Stone Ridge. However, Elfun Diversified is 2.32 times more volatile than Stone Ridge Diversified. It trades about 0.15 of its potential returns per unit of risk. Stone Ridge Diversified is currently generating about -0.19 per unit of risk. If you would invest 2,054 in Elfun Diversified Fund on December 4, 2024 and sell it today you would earn a total of 28.00 from holding Elfun Diversified Fund or generate 1.36% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Elfun Diversified Fund vs. Stone Ridge Diversified
Performance |
Timeline |
Elfun Diversified |
Stone Ridge Diversified |
Elfun Diversified and Stone Ridge Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Elfun Diversified and Stone Ridge
The main advantage of trading using opposite Elfun Diversified and Stone Ridge positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elfun Diversified position performs unexpectedly, Stone Ridge 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 Stone Ridge will offset losses from the drop in Stone Ridge's long position.Elfun Diversified vs. Fsultx | Elfun Diversified vs. Flakqx | Elfun Diversified vs. Iaadx | Elfun Diversified vs. Arrow Managed Futures |
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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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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