Correlation Between Madison Diversified and Elfun Diversified
Can any of the company-specific risk be diversified away by investing in both Madison Diversified and Elfun 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 Madison Diversified and Elfun Diversified into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Madison Diversified Income and Elfun Diversified Fund, you can compare the effects of market volatilities on Madison Diversified and Elfun 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 Madison Diversified with a short position of Elfun Diversified. Check out your portfolio center. Please also check ongoing floating volatility patterns of Madison Diversified and Elfun Diversified.
Diversification Opportunities for Madison Diversified and Elfun Diversified
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Madison and Elfun is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Madison Diversified Income and Elfun Diversified Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elfun Diversified and Madison 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 Madison Diversified Income are associated (or correlated) with Elfun Diversified. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Elfun Diversified has no effect on the direction of Madison Diversified i.e., Madison Diversified and Elfun Diversified go up and down completely randomly.
Pair Corralation between Madison Diversified and Elfun Diversified
Assuming the 90 days horizon Madison Diversified is expected to generate 1.35 times less return on investment than Elfun Diversified. But when comparing it to its historical volatility, Madison Diversified Income is 1.38 times less risky than Elfun Diversified. It trades about 0.21 of its potential returns per unit of risk. Elfun Diversified Fund is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 2,207 in Elfun Diversified Fund on June 6, 2025 and sell it today you would earn a total of 37.00 from holding Elfun Diversified Fund or generate 1.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Madison Diversified Income vs. Elfun Diversified Fund
Performance |
| Timeline |
| Madison Diversified |
| Elfun Diversified |
Madison Diversified and Elfun Diversified Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Madison Diversified and Elfun Diversified
The main advantage of trading using opposite Madison Diversified and Elfun Diversified positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Madison Diversified position performs unexpectedly, Elfun 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 Elfun Diversified will offset losses from the drop in Elfun Diversified's long position.| Madison Diversified vs. Madison Mid Cap | Madison Diversified vs. Madison Moderate Allocation | Madison Diversified vs. Madison Investors Fund | Madison Diversified vs. Madison Investors Fund |
| Elfun Diversified vs. State Street Target | Elfun Diversified vs. State Street Target | Elfun Diversified vs. State Street Target | Elfun Diversified vs. State Street Aggregate |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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