Correlation Between Elfun Diversified and Arbitrage Event
Can any of the company-specific risk be diversified away by investing in both Elfun Diversified and Arbitrage Event 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 Arbitrage Event 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 The Arbitrage Event Driven, you can compare the effects of market volatilities on Elfun Diversified and Arbitrage Event 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 Arbitrage Event. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elfun Diversified and Arbitrage Event.
Diversification Opportunities for Elfun Diversified and Arbitrage Event
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Elfun and Arbitrage is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Elfun Diversified Fund and The Arbitrage Event Driven in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arbitrage Event 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 Arbitrage Event. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arbitrage Event has no effect on the direction of Elfun Diversified i.e., Elfun Diversified and Arbitrage Event go up and down completely randomly.
Pair Corralation between Elfun Diversified and Arbitrage Event
Assuming the 90 days horizon Elfun Diversified Fund is expected to generate 3.45 times more return on investment than Arbitrage Event. However, Elfun Diversified is 3.45 times more volatile than The Arbitrage Event Driven. It trades about 0.28 of its potential returns per unit of risk. The Arbitrage Event Driven is currently generating about 0.44 per unit of risk. If you would invest 2,118 in Elfun Diversified Fund on May 26, 2025 and sell it today you would earn a total of 136.00 from holding Elfun Diversified Fund or generate 6.42% 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. The Arbitrage Event Driven
Performance |
| Timeline |
| Elfun Diversified |
| Arbitrage Event |
Elfun Diversified and Arbitrage Event Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Elfun Diversified and Arbitrage Event
The main advantage of trading using opposite Elfun Diversified and Arbitrage Event positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elfun Diversified position performs unexpectedly, Arbitrage Event 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 Arbitrage Event will offset losses from the drop in Arbitrage Event's long position.| Elfun Diversified vs. Rmb Mendon Financial | Elfun Diversified vs. Goldman Sachs Financial | Elfun Diversified vs. Vanguard Financials Index | Elfun Diversified vs. Financials Ultrasector Profund |
| Arbitrage Event vs. Vanguard Reit Index | Arbitrage Event vs. Fidelity Real Estate | Arbitrage Event vs. Davis Real Estate | Arbitrage Event vs. Prudential Real Estate |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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