Correlation Between Elfun Trusts and WILLIAMS

Can any of the company-specific risk be diversified away by investing in both Elfun Trusts and WILLIAMS 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 WILLIAMS 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 WILLIAMS INC 875, you can compare the effects of market volatilities on Elfun Trusts and WILLIAMS 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 WILLIAMS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elfun Trusts and WILLIAMS.

Diversification Opportunities for Elfun Trusts and WILLIAMS

0.1

Correlation Coefficient

Elfun Trusts  WILLIAMS

Average diversification

The 3 months correlation between Elfun and WILLIAMS is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Elfun Trusts Elfun and WILLIAMS INC 875 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WILLIAMS INC 875 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 WILLIAMS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WILLIAMS INC 875 has no effect on the direction of Elfun Trusts i.e., Elfun Trusts and WILLIAMS go up and down completely randomly.

Pair Corralation between Elfun Trusts and WILLIAMS

Assuming the 90 days horizon Elfun Trusts Elfun is expected to under-perform the WILLIAMS. In addition to that, Elfun Trusts is 2.31 times more volatile than WILLIAMS INC 875. It trades about -0.05 of its total potential returns per unit of risk. WILLIAMS INC 875 is currently generating about 0.0 per unit of volatility. If you would invest  12,148  in WILLIAMS INC 875 on October 7, 2024 and sell it today you would lose (6.00) from holding WILLIAMS INC 875 or give up 0.05% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	90.48%
Values	Daily Returns

Elfun Trusts Elfun  vs.  WILLIAMS INC 875

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.

WILLIAMS INC 875

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days WILLIAMS INC 875 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, WILLIAMS 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 WILLIAMS

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

The idea behind Elfun Trusts Elfun and WILLIAMS INC 875 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.