Correlation Between Elfun Trusts and NESNVX

Can any of the company-specific risk be diversified away by investing in both Elfun Trusts and NESNVX 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 Trusts and NESNVX into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Elfun Trusts Elfun and NESNVX 115 14 JAN 27, you can compare the effects of market volatilities on Elfun Trusts and NESNVX 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 Trusts with a short position of NESNVX. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elfun Trusts and NESNVX.

Diversification Opportunities for Elfun Trusts and NESNVX

0.66

Correlation Coefficient

Elfun Trusts  NESNVX

Poor diversification

The 3 months correlation between Elfun and NESNVX is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Elfun Trusts Elfun and NESNVX 115 14 JAN 27 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NESNVX 115 14 and Elfun Trusts 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 Trusts Elfun are associated (or correlated) with NESNVX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NESNVX 115 14 has no effect on the direction of Elfun Trusts i.e., Elfun Trusts and NESNVX go up and down completely randomly.

Pair Corralation between Elfun Trusts and NESNVX

Assuming the 90 days horizon Elfun Trusts is expected to generate 1.28 times less return on investment than NESNVX. But when comparing it to its historical volatility, Elfun Trusts Elfun is 1.58 times less risky than NESNVX. It trades about 0.04 of its potential returns per unit of risk. NESNVX 115 14 JAN 27 is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  9,348  in NESNVX 115 14 JAN 27 on September 30, 2024 and sell it today you would earn a total of  30.00  from holding NESNVX 115 14 JAN 27 or generate 0.32% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	42.86%
Values	Daily Returns

Elfun Trusts Elfun  vs.  NESNVX 115 14 JAN 27

Elfun Trusts Elfun

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Elfun Trusts Elfun are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Elfun Trusts is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

NESNVX 115 14

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days NESNVX 115 14 JAN 27 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, NESNVX is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Elfun Trusts and NESNVX

The main advantage of trading using opposite Elfun Trusts and NESNVX positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elfun Trusts position performs unexpectedly, NESNVX 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 NESNVX will offset losses from the drop in NESNVX's long position.

The idea behind Elfun Trusts Elfun and NESNVX 115 14 JAN 27 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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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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.