Correlation Between Elfun Government and Victory Rs

Can any of the company-specific risk be diversified away by investing in both Elfun Government and Victory Rs 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 Government and Victory Rs into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Elfun Government Money and Victory Rs Investors, you can compare the effects of market volatilities on Elfun Government and Victory Rs 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 Government with a short position of Victory Rs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elfun Government and Victory Rs.

Diversification Opportunities for Elfun Government and Victory Rs

0.0

Correlation Coefficient

Elfun Government  Victory Rs

Pay attention - limited upside

The 3 months correlation between Elfun and Victory is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Elfun Government Money and Victory Rs Investors in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Victory Rs Investors and Elfun Government 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 Government Money are associated (or correlated) with Victory Rs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Victory Rs Investors has no effect on the direction of Elfun Government i.e., Elfun Government and Victory Rs go up and down completely randomly.

Pair Corralation between Elfun Government and Victory Rs

Assuming the 90 days horizon Elfun Government Money is expected to generate 39.03 times more return on investment than Victory Rs. However, Elfun Government is 39.03 times more volatile than Victory Rs Investors. It trades about 0.06 of its potential returns per unit of risk. Victory Rs Investors is currently generating about 0.09 per unit of risk. If you would invest  366.00  in Elfun Government Money on September 16, 2024 and sell it today you would lose (266.00) from holding Elfun Government Money or give up 72.68% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	97.83%
Values	Daily Returns

Elfun Government Money  vs.  Victory Rs Investors

Elfun Government Money

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Elfun Government Money has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Elfun Government is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Victory Rs Investors

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Victory Rs Investors are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Victory Rs 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 Government and Victory Rs

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

The idea behind Elfun Government Money and Victory Rs Investors 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.

Check out your portfolio center.

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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.