Correlation Between Elfun Diversified and Internet Fund

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

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

Diversification Opportunities for Elfun Diversified and Internet Fund

0.29

Correlation Coefficient

Elfun Diversified  Internet Fund

Modest diversification

The 3 months correlation between Elfun and Internet is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Elfun Diversified Fund and Internet Fund Investor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Internet Fund Investor and Elfun 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 Elfun Diversified Fund are associated (or correlated) with Internet Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Internet Fund Investor has no effect on the direction of Elfun Diversified i.e., Elfun Diversified and Internet Fund go up and down completely randomly.

Pair Corralation between Elfun Diversified and Internet Fund

Assuming the 90 days horizon Elfun Diversified Fund is expected to generate 0.44 times more return on investment than Internet Fund. However, Elfun Diversified Fund is 2.26 times less risky than Internet Fund. It trades about 0.1 of its potential returns per unit of risk. Internet Fund Investor is currently generating about -0.05 per unit of risk. If you would invest  2,330  in Elfun Diversified Fund on September 6, 2025 and sell it today you would earn a total of  26.00  from holding Elfun Diversified Fund or generate 1.12% return on investment over 90 days.

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

Elfun Diversified Fund  vs.  Internet Fund Investor

Elfun Diversified

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Elfun Diversified Fund are ranked lower than 10 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical and fundamental indicators, Elfun Diversified is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Internet Fund Investor

Risk-Adjusted Performance

Weakest

Over the last 90 days Internet Fund Investor has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward indicators, Internet Fund 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 Diversified and Internet Fund

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

The idea behind Elfun Diversified Fund and Internet Fund Investor 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.

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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.