Correlation Between Elfun Diversified and Western Asset
Can any of the company-specific risk be diversified away by investing in both Elfun Diversified and Western Asset 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 Western Asset 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 Western Asset Inflation, you can compare the effects of market volatilities on Elfun Diversified and Western Asset 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 Western Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elfun Diversified and Western Asset.
Diversification Opportunities for Elfun Diversified and Western Asset
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Elfun and Western is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Elfun Diversified Fund and Western Asset Inflation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Asset Inflation 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 Western Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Asset Inflation has no effect on the direction of Elfun Diversified i.e., Elfun Diversified and Western Asset go up and down completely randomly.
Pair Corralation between Elfun Diversified and Western Asset
Assuming the 90 days horizon Elfun Diversified is expected to generate 1.68 times less return on investment than Western Asset. In addition to that, Elfun Diversified is 1.95 times more volatile than Western Asset Inflation. It trades about 0.05 of its total potential returns per unit of risk. Western Asset Inflation is currently generating about 0.16 per unit of volatility. If you would invest 919.00 in Western Asset Inflation on December 28, 2024 and sell it today you would earn a total of 24.00 from holding Western Asset Inflation or generate 2.61% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Elfun Diversified Fund vs. Western Asset Inflation
Performance |
Timeline |
Elfun Diversified |
Western Asset Inflation |
Elfun Diversified and Western Asset Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Elfun Diversified and Western Asset
The main advantage of trading using opposite Elfun Diversified and Western Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elfun Diversified position performs unexpectedly, Western Asset 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 Western Asset will offset losses from the drop in Western Asset's long position.Elfun Diversified vs. Guidemark Large Cap | Elfun Diversified vs. T Rowe Price | Elfun Diversified vs. Pace Large Value | Elfun Diversified vs. Jhancock Disciplined Value |
Western Asset vs. Massmutual Premier Diversified | Western Asset vs. Tax Free Conservative Income | Western Asset vs. Harbor Diversified International | Western Asset vs. Diversified Bond Fund |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
Other Complementary Tools
Fundamental Analysis View fundamental data based on most recent published financial statements | |
Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
Transaction History View history of all your transactions and understand their impact on performance |