Correlation Between Elfun Trusts and CARRIER

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

Diversification Opportunities for Elfun Trusts and CARRIER

0.4

Correlation Coefficient

Elfun Trusts  CARRIER

Very weak diversification

The 3 months correlation between Elfun and CARRIER is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Elfun Trusts Elfun and CARRIER GLOBAL P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CARRIER GLOBAL P 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 CARRIER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CARRIER GLOBAL P has no effect on the direction of Elfun Trusts i.e., Elfun Trusts and CARRIER go up and down completely randomly.

Pair Corralation between Elfun Trusts and CARRIER

Assuming the 90 days horizon Elfun Trusts Elfun is expected to generate 1.21 times more return on investment than CARRIER. However, Elfun Trusts is 1.21 times more volatile than CARRIER GLOBAL P. It trades about -0.02 of its potential returns per unit of risk. CARRIER GLOBAL P is currently generating about -0.09 per unit of risk. If you would invest  9,358  in Elfun Trusts Elfun on October 7, 2024 and sell it today you would lose (448.00) from holding Elfun Trusts Elfun or give up 4.79% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	93.65%
Values	Daily Returns

Elfun Trusts Elfun  vs.  CARRIER GLOBAL P

Elfun Trusts Elfun

Risk-Adjusted Performance

0 of 100

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 fairly strong basic indicators, Elfun Trusts is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

CARRIER GLOBAL P

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CARRIER GLOBAL P has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Bond's basic indicators remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for CARRIER GLOBAL P investors.

Pair Trading with Elfun Trusts and CARRIER

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

The idea behind Elfun Trusts Elfun and CARRIER GLOBAL P 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.