Correlation Between Elfun Trusts and KROGER

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

Diversification Opportunities for Elfun Trusts and KROGER

0.17

Correlation Coefficient

Elfun Trusts  KROGER

Average diversification

The 3 months correlation between Elfun and KROGER is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Elfun Trusts Elfun and KROGER CO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KROGER CO 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 KROGER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KROGER CO has no effect on the direction of Elfun Trusts i.e., Elfun Trusts and KROGER go up and down completely randomly.

Pair Corralation between Elfun Trusts and KROGER

Assuming the 90 days horizon Elfun Trusts Elfun is expected to under-perform the KROGER. But the mutual fund apears to be less risky and, when comparing its historical volatility, Elfun Trusts Elfun is 1.96 times less risky than KROGER. The mutual fund trades about -0.11 of its potential returns per unit of risk. The KROGER CO is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  7,541  in KROGER CO on December 29, 2024 and sell it today you would earn a total of  244.00  from holding KROGER CO or generate 3.24% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	70.49%
Values	Daily Returns

Elfun Trusts Elfun  vs.  KROGER CO

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.

KROGER CO

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in KROGER CO are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, KROGER 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 KROGER

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

The idea behind Elfun Trusts Elfun and KROGER CO 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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.