Correlation Between Elfun Diversified and Columbia Diversified
Can any of the company-specific risk be diversified away by investing in both Elfun Diversified and Columbia Diversified 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 Diversified and Columbia Diversified into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Elfun Diversified Fund and Columbia Diversified Equity, you can compare the effects of market volatilities on Elfun Diversified and Columbia Diversified 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 Diversified with a short position of Columbia Diversified. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elfun Diversified and Columbia Diversified.
Diversification Opportunities for Elfun Diversified and Columbia Diversified
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Elfun and Columbia is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Elfun Diversified Fund and Columbia Diversified Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Columbia Diversified and Elfun Diversified 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 Diversified Fund are associated (or correlated) with Columbia Diversified. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Columbia Diversified has no effect on the direction of Elfun Diversified i.e., Elfun Diversified and Columbia Diversified go up and down completely randomly.
Pair Corralation between Elfun Diversified and Columbia Diversified
Assuming the 90 days horizon Elfun Diversified is expected to generate 1.47 times less return on investment than Columbia Diversified. But when comparing it to its historical volatility, Elfun Diversified Fund is 1.9 times less risky than Columbia Diversified. It trades about 0.32 of its potential returns per unit of risk. Columbia Diversified Equity is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 1,585 in Columbia Diversified Equity on April 30, 2025 and sell it today you would earn a total of 177.00 from holding Columbia Diversified Equity or generate 11.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Elfun Diversified Fund vs. Columbia Diversified Equity
Performance |
| Timeline |
| Elfun Diversified |
| Columbia Diversified |
Elfun Diversified and Columbia Diversified Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Elfun Diversified and Columbia Diversified
The main advantage of trading using opposite Elfun Diversified and Columbia Diversified positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elfun Diversified position performs unexpectedly, Columbia Diversified 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 Columbia Diversified will offset losses from the drop in Columbia Diversified's long position.| Elfun Diversified vs. Bbh Intermediate Municipal | Elfun Diversified vs. Dunham Porategovernment Bond | Elfun Diversified vs. Aig Government Money | Elfun Diversified vs. Inverse Government Long |
| Columbia Diversified vs. Chartwell Short Duration | Columbia Diversified vs. Fidelity Flex Servative | Columbia Diversified vs. Leader Short Term Bond | Columbia Diversified vs. Franklin Federal Limited Term |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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