Correlation Between Elfun Trusts and CARDINAL

Can any of the company-specific risk be diversified away by investing in both Elfun Trusts and CARDINAL 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 CARDINAL 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 CARDINAL HEALTH INC, you can compare the effects of market volatilities on Elfun Trusts and CARDINAL 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 CARDINAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elfun Trusts and CARDINAL.

Diversification Opportunities for Elfun Trusts and CARDINAL

0.37

Correlation Coefficient

Elfun Trusts  CARDINAL

Weak diversification

The 3 months correlation between Elfun and CARDINAL is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Elfun Trusts Elfun and CARDINAL HEALTH INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CARDINAL HEALTH INC 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 CARDINAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CARDINAL HEALTH INC has no effect on the direction of Elfun Trusts i.e., Elfun Trusts and CARDINAL go up and down completely randomly.

Pair Corralation between Elfun Trusts and CARDINAL

Assuming the 90 days horizon Elfun Trusts Elfun is expected to generate 0.91 times more return on investment than CARDINAL. However, Elfun Trusts Elfun is 1.1 times less risky than CARDINAL. It trades about 0.06 of its potential returns per unit of risk. CARDINAL HEALTH INC is currently generating about 0.03 per unit of risk. If you would invest  7,115  in Elfun Trusts Elfun on December 2, 2024 and sell it today you would earn a total of  1,705  from holding Elfun Trusts Elfun or generate 23.96% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	67.57%
Values	Daily Returns

Elfun Trusts Elfun  vs.  CARDINAL HEALTH INC

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 latest weak performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

CARDINAL HEALTH INC

Risk-Adjusted Performance

Very Weak

Over the last 90 days CARDINAL HEALTH INC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, CARDINAL is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Elfun Trusts and CARDINAL

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

The idea behind Elfun Trusts Elfun and CARDINAL HEALTH INC 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..