Correlation Between Elfun Diversified and Principal Lifetime
Can any of the company-specific risk be diversified away by investing in both Elfun Diversified and Principal Lifetime 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 Principal Lifetime 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 Principal Lifetime Hybrid, you can compare the effects of market volatilities on Elfun Diversified and Principal Lifetime 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 Principal Lifetime. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elfun Diversified and Principal Lifetime.
Diversification Opportunities for Elfun Diversified and Principal Lifetime
1.0 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Elfun and Principal is 1.0. Overlapping area represents the amount of risk that can be diversified away by holding Elfun Diversified Fund and Principal Lifetime Hybrid in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Principal Lifetime Hybrid 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 Principal Lifetime. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Principal Lifetime Hybrid has no effect on the direction of Elfun Diversified i.e., Elfun Diversified and Principal Lifetime go up and down completely randomly.
Pair Corralation between Elfun Diversified and Principal Lifetime
Assuming the 90 days horizon Elfun Diversified Fund is expected to generate 1.15 times more return on investment than Principal Lifetime. However, Elfun Diversified is 1.15 times more volatile than Principal Lifetime Hybrid. It trades about 0.2 of its potential returns per unit of risk. Principal Lifetime Hybrid is currently generating about 0.2 per unit of risk. If you would invest 2,200 in Elfun Diversified Fund on July 20, 2025 and sell it today you would earn a total of 116.00 from holding Elfun Diversified Fund or generate 5.27% 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. Principal Lifetime Hybrid
Performance |
| Timeline |
| Elfun Diversified |
| Principal Lifetime Hybrid |
Elfun Diversified and Principal Lifetime Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Elfun Diversified and Principal Lifetime
The main advantage of trading using opposite Elfun Diversified and Principal Lifetime positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elfun Diversified position performs unexpectedly, Principal Lifetime 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 Principal Lifetime will offset losses from the drop in Principal Lifetime's long position.| Elfun Diversified vs. Barings Active Short | Elfun Diversified vs. Siit Ultra Short | Elfun Diversified vs. Calvert Short Duration | Elfun Diversified vs. Short Intermediate Bond Fund |
| Principal Lifetime vs. Rbc Money Market | Principal Lifetime vs. Dws Government Money | Principal Lifetime vs. Ab Bond Inflation | Principal Lifetime vs. Intermediate Term Bond Fund |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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