Correlation Between Copley Fund and Elfun Trusts

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

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

Diversification Opportunities for Copley Fund and Elfun Trusts

0.93

Correlation Coefficient

Copley Fund  Elfun Trusts

Almost no diversification

The 3 months correlation between Copley and Elfun is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Copley Fund Inc and Elfun Trusts Elfun in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elfun Trusts Elfun and Copley Fund 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 Copley Fund Inc are associated (or correlated) with Elfun Trusts. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Elfun Trusts Elfun has no effect on the direction of Copley Fund i.e., Copley Fund and Elfun Trusts go up and down completely randomly.

Pair Corralation between Copley Fund and Elfun Trusts

Assuming the 90 days horizon Copley Fund Inc is expected to under-perform the Elfun Trusts. But the mutual fund apears to be less risky and, when comparing its historical volatility, Copley Fund Inc is 1.27 times less risky than Elfun Trusts. The mutual fund trades about -0.17 of its potential returns per unit of risk. The Elfun Trusts Elfun is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest  9,833  in Elfun Trusts Elfun on September 24, 2024 and sell it today you would lose (39.00) from holding Elfun Trusts Elfun or give up 0.4% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

Copley Fund Inc  vs.  Elfun Trusts Elfun

Copley Fund

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Copley Fund Inc are ranked lower than 8 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong essential indicators, Copley Fund is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Elfun Trusts Elfun

Risk-Adjusted Performance

5 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Elfun Trusts Elfun are ranked lower than 5 (%) 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.

Pair Trading with Copley Fund and Elfun Trusts

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

The idea behind Copley Fund Inc and Elfun Trusts Elfun 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.