Correlation Between Strategic Allocation: and Payden Core
Can any of the company-specific risk be diversified away by investing in both Strategic Allocation: and Payden Core 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 Strategic Allocation: and Payden Core into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Strategic Allocation Aggressive and Payden E Bond, you can compare the effects of market volatilities on Strategic Allocation: and Payden Core 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 Strategic Allocation: with a short position of Payden Core. Check out your portfolio center. Please also check ongoing floating volatility patterns of Strategic Allocation: and Payden Core.
Diversification Opportunities for Strategic Allocation: and Payden Core
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between STRATEGIC and Payden is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Strategic Allocation Aggressiv and Payden E Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Payden E Bond and Strategic Allocation: 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 Strategic Allocation Aggressive are associated (or correlated) with Payden Core. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Payden E Bond has no effect on the direction of Strategic Allocation: i.e., Strategic Allocation: and Payden Core go up and down completely randomly.
Pair Corralation between Strategic Allocation: and Payden Core
Assuming the 90 days horizon Strategic Allocation Aggressive is expected to generate 1.87 times more return on investment than Payden Core. However, Strategic Allocation: is 1.87 times more volatile than Payden E Bond. It trades about 0.22 of its potential returns per unit of risk. Payden E Bond is currently generating about 0.05 per unit of risk. If you would invest 835.00 in Strategic Allocation Aggressive on August 29, 2024 and sell it today you would earn a total of 25.00 from holding Strategic Allocation Aggressive or generate 2.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Strategic Allocation Aggressiv vs. Payden E Bond
Performance |
| Timeline |
| Strategic Allocation: |
| Payden E Bond |
Strategic Allocation: and Payden Core Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Strategic Allocation: and Payden Core
The main advantage of trading using opposite Strategic Allocation: and Payden Core positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Strategic Allocation: position performs unexpectedly, Payden Core 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 Payden Core will offset losses from the drop in Payden Core's long position.| Strategic Allocation: vs. Federated Emerging Market | Strategic Allocation: vs. T Rowe Price | Strategic Allocation: vs. Barings Emerging Markets | Strategic Allocation: vs. Angel Oak Multi Strategy |
| Payden Core vs. Strategic Allocation Aggressive | Payden Core vs. Western Asset High | Payden Core vs. Ppm High Yield | Payden Core vs. Ab High Income |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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