Correlation Between Elfun Trusts and Viking

Can any of the company-specific risk be diversified away by investing in both Elfun Trusts and Viking 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 Viking 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 Viking Cruises Ltd, you can compare the effects of market volatilities on Elfun Trusts and Viking 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 Viking. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elfun Trusts and Viking.

Diversification Opportunities for Elfun Trusts and Viking

-0.46

Correlation Coefficient

Elfun Trusts  Viking

Very good diversification

The 3 months correlation between Elfun and Viking is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Elfun Trusts Elfun and Viking Cruises Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Viking Cruises 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 Viking. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Viking Cruises has no effect on the direction of Elfun Trusts i.e., Elfun Trusts and Viking go up and down completely randomly.

Pair Corralation between Elfun Trusts and Viking

Assuming the 90 days horizon Elfun Trusts Elfun is expected to generate 0.38 times more return on investment than Viking. However, Elfun Trusts Elfun is 2.66 times less risky than Viking. It trades about 0.15 of its potential returns per unit of risk. Viking Cruises Ltd is currently generating about -0.17 per unit of risk. If you would invest  9,378  in Elfun Trusts Elfun on September 14, 2024 and sell it today you would earn a total of  608.00  from holding Elfun Trusts Elfun or generate 6.48% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	88.89%
Values	Daily Returns

Elfun Trusts Elfun  vs.  Viking Cruises Ltd

Elfun Trusts Elfun

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Elfun Trusts Elfun are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Elfun Trusts may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Viking Cruises

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Viking Cruises Ltd has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Bond's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for Viking Cruises Ltd investors.

Pair Trading with Elfun Trusts and Viking

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

The idea behind Elfun Trusts Elfun and Viking Cruises Ltd 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.