Correlation Between Elfun Trusts and XIAOMI

Can any of the company-specific risk be diversified away by investing in both Elfun Trusts and XIAOMI 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 XIAOMI 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 XIAOMI 3375 29 APR 30, you can compare the effects of market volatilities on Elfun Trusts and XIAOMI 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 XIAOMI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elfun Trusts and XIAOMI.

Diversification Opportunities for Elfun Trusts and XIAOMI

0.76

Correlation Coefficient

Elfun Trusts  XIAOMI

Poor diversification

The 3 months correlation between Elfun and XIAOMI is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Elfun Trusts Elfun and XIAOMI 3375 29 APR 30 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on XIAOMI 3375 29 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 XIAOMI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of XIAOMI 3375 29 has no effect on the direction of Elfun Trusts i.e., Elfun Trusts and XIAOMI go up and down completely randomly.

Pair Corralation between Elfun Trusts and XIAOMI

Assuming the 90 days horizon Elfun Trusts is expected to generate 1.08 times less return on investment than XIAOMI. But when comparing it to its historical volatility, Elfun Trusts Elfun is 1.24 times less risky than XIAOMI. It trades about 0.13 of its potential returns per unit of risk. XIAOMI 3375 29 APR 30 is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  8,401  in XIAOMI 3375 29 APR 30 on September 20, 2024 and sell it today you would earn a total of  741.00  from holding XIAOMI 3375 29 APR 30 or generate 8.82% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	14.95%
Values	Daily Returns

Elfun Trusts Elfun  vs.  XIAOMI 3375 29 APR 30

Elfun Trusts Elfun

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Elfun Trusts Elfun are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. 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.

XIAOMI 3375 29

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days XIAOMI 3375 29 APR 30 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unsteady performance, the Bond's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for XIAOMI 3375 29 APR 30 investors.

Pair Trading with Elfun Trusts and XIAOMI

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

The idea behind Elfun Trusts Elfun and XIAOMI 3375 29 APR 30 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 Anywhere module to track or share privately all of your investments from the convenience of any device.