Correlation Between Elfun Government and Scout Small
Can any of the company-specific risk be diversified away by investing in both Elfun Government and Scout Small 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 Scout Small 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 Scout Small Cap, you can compare the effects of market volatilities on Elfun Government and Scout Small 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 Scout Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elfun Government and Scout Small.
Diversification Opportunities for Elfun Government and Scout Small
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Elfun and Scout is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Elfun Government Money and Scout Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scout Small Cap 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 Scout Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Scout Small Cap has no effect on the direction of Elfun Government i.e., Elfun Government and Scout Small go up and down completely randomly.
Pair Corralation between Elfun Government and Scout Small
Assuming the 90 days horizon Elfun Government Money is expected to generate 23.94 times more return on investment than Scout Small. However, Elfun Government is 23.94 times more volatile than Scout Small Cap. It trades about 0.06 of its potential returns per unit of risk. Scout Small Cap is currently generating about 0.05 per unit of risk. If you would invest 369.00 in Elfun Government Money on September 26, 2024 and sell it today you would lose (269.00) from holding Elfun Government Money or give up 72.9% 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. Scout Small Cap
Performance |
Timeline |
Elfun Government Money |
Scout Small Cap |
Elfun Government and Scout Small Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Elfun Government and Scout Small
The main advantage of trading using opposite Elfun Government and Scout Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elfun Government position performs unexpectedly, Scout Small 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 Scout Small will offset losses from the drop in Scout Small's long position.Elfun Government vs. Jhancock Disciplined Value | Elfun Government vs. Dunham Large Cap | Elfun Government vs. M Large Cap | Elfun Government vs. Qs Large Cap |
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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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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