Correlation Between Elfun Diversified and Vanguard Pacific
Can any of the company-specific risk be diversified away by investing in both Elfun Diversified and Vanguard Pacific 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 Vanguard Pacific 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 Vanguard Pacific Stock, you can compare the effects of market volatilities on Elfun Diversified and Vanguard Pacific 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 Vanguard Pacific. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elfun Diversified and Vanguard Pacific.
Diversification Opportunities for Elfun Diversified and Vanguard Pacific
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Elfun and Vanguard is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Elfun Diversified Fund and Vanguard Pacific Stock in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard Pacific Stock 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 Vanguard Pacific. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard Pacific Stock has no effect on the direction of Elfun Diversified i.e., Elfun Diversified and Vanguard Pacific go up and down completely randomly.
Pair Corralation between Elfun Diversified and Vanguard Pacific
Assuming the 90 days horizon Elfun Diversified is expected to generate 1.52 times less return on investment than Vanguard Pacific. But when comparing it to its historical volatility, Elfun Diversified Fund is 2.05 times less risky than Vanguard Pacific. It trades about 0.13 of its potential returns per unit of risk. Vanguard Pacific Stock is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 1,634 in Vanguard Pacific Stock on August 17, 2025 and sell it today you would earn a total of 96.00 from holding Vanguard Pacific Stock or generate 5.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 98.46% |
| Values | Daily Returns |
Elfun Diversified Fund vs. Vanguard Pacific Stock
Performance |
| Timeline |
| Elfun Diversified |
| Vanguard Pacific Stock |
Elfun Diversified and Vanguard Pacific Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Elfun Diversified and Vanguard Pacific
The main advantage of trading using opposite Elfun Diversified and Vanguard Pacific positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elfun Diversified position performs unexpectedly, Vanguard Pacific 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 Vanguard Pacific will offset losses from the drop in Vanguard Pacific's long position.The idea behind Elfun Diversified Fund and Vanguard Pacific Stock 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.
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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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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