Correlation Between Ab Impact and Payden Government
Can any of the company-specific risk be diversified away by investing in both Ab Impact and Payden Government 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 Ab Impact and Payden Government into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ab Impact Municipal and Payden Government Fund, you can compare the effects of market volatilities on Ab Impact and Payden Government 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 Ab Impact with a short position of Payden Government. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Impact and Payden Government.
Diversification Opportunities for Ab Impact and Payden Government
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ABIMX and Payden is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Ab Impact Municipal and Payden Government Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Payden Government and Ab Impact 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 Ab Impact Municipal are associated (or correlated) with Payden Government. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Payden Government has no effect on the direction of Ab Impact i.e., Ab Impact and Payden Government go up and down completely randomly.
Pair Corralation between Ab Impact and Payden Government
Assuming the 90 days horizon Ab Impact Municipal is expected to under-perform the Payden Government. In addition to that, Ab Impact is 2.21 times more volatile than Payden Government Fund. It trades about -0.1 of its total potential returns per unit of risk. Payden Government Fund is currently generating about -0.12 per unit of volatility. If you would invest 945.00 in Payden Government Fund on October 18, 2024 and sell it today you would lose (14.00) from holding Payden Government Fund or give up 1.48% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ab Impact Municipal vs. Payden Government Fund
Performance |
| Timeline |
| Ab Impact Municipal |
| Payden Government |
Ab Impact and Payden Government Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ab Impact and Payden Government
The main advantage of trading using opposite Ab Impact and Payden Government positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Impact position performs unexpectedly, Payden Government 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 Government will offset losses from the drop in Payden Government's long position.| Ab Impact vs. Amg River Road | Ab Impact vs. Boston Partners Small | Ab Impact vs. Fpa Queens Road | Ab Impact vs. Mutual Of America |
| Payden Government vs. Tax Managed Large Cap | Payden Government vs. Ab Impact Municipal | Payden Government vs. Volumetric Fund Volumetric | Payden Government vs. Fmasx |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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