Correlation Between Elfun Trusts and First Trust

Can any of the company-specific risk be diversified away by investing in both Elfun Trusts and First Trust 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 Trusts and First Trust into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Elfun Trusts Elfun and First Trust High, you can compare the effects of market volatilities on Elfun Trusts and First Trust 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 Trusts with a short position of First Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elfun Trusts and First Trust.

Diversification Opportunities for Elfun Trusts and First Trust

0.0

Correlation Coefficient

Elfun Trusts  First Trust

Pay attention - limited upside

The 3 months correlation between Elfun and First is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Elfun Trusts Elfun and First Trust High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Trust High and Elfun Trusts 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 Trusts Elfun are associated (or correlated) with First Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Trust High has no effect on the direction of Elfun Trusts i.e., Elfun Trusts and First Trust go up and down completely randomly.

Pair Corralation between Elfun Trusts and First Trust

If you would invest (100.00) in First Trust High on December 25, 2024 and sell it today you would earn a total of  100.00  from holding First Trust High or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Elfun Trusts Elfun  vs.  First Trust High

Elfun Trusts Elfun

Risk-Adjusted Performance

Very Weak

Over the last 90 days Elfun Trusts Elfun has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's basic indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

First Trust High

Risk-Adjusted Performance

Very Weak

Over the last 90 days First Trust High has generated negative risk-adjusted returns adding no value to fund investors. In spite of rather sound basic indicators, First Trust is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Elfun Trusts and First Trust

The main advantage of trading using opposite Elfun Trusts and First Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elfun Trusts position performs unexpectedly, First Trust 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 First Trust will offset losses from the drop in First Trust's long position.

The idea behind Elfun Trusts Elfun and First Trust High pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.