Correlation Between Principal Lifetime and Elfun Diversified
Can any of the company-specific risk be diversified away by investing in both Principal Lifetime 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 Principal Lifetime and Elfun Diversified into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Principal Lifetime Hybrid and Elfun Diversified Fund, you can compare the effects of market volatilities on Principal Lifetime 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 Principal Lifetime with a short position of Elfun Diversified. Check out your portfolio center. Please also check ongoing floating volatility patterns of Principal Lifetime and Elfun Diversified.
Diversification Opportunities for Principal Lifetime and Elfun Diversified
1.0 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Principal and Elfun is 1.0. Overlapping area represents the amount of risk that can be diversified away by holding Principal Lifetime Hybrid and Elfun Diversified Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elfun Diversified and Principal Lifetime 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 Principal Lifetime Hybrid 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 Principal Lifetime i.e., Principal Lifetime and Elfun Diversified go up and down completely randomly.
Pair Corralation between Principal Lifetime and Elfun Diversified
Assuming the 90 days horizon Principal Lifetime is expected to generate 1.15 times less return on investment than Elfun Diversified. But when comparing it to its historical volatility, Principal Lifetime Hybrid is 1.15 times less risky than Elfun Diversified. It trades about 0.2 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 2,200 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 |
Principal Lifetime Hybrid vs. Elfun Diversified Fund
Performance |
| Timeline |
| Principal Lifetime Hybrid |
| Elfun Diversified |
Principal Lifetime and Elfun Diversified Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Principal Lifetime and Elfun Diversified
The main advantage of trading using opposite Principal Lifetime and Elfun Diversified positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Principal Lifetime 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.| 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 |
| 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 |
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 Channel module to use Commodity Channel Index to analyze current equity momentum.
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