Correlation Between Ab High and Payden Core
Can any of the company-specific risk be diversified away by investing in both Ab High 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 Ab High and Payden Core into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ab High Income and Payden E Bond, you can compare the effects of market volatilities on Ab High 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 Ab High with a short position of Payden Core. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab High and Payden Core.
Diversification Opportunities for Ab High and Payden Core
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between AGDAX and Payden is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Ab High Income 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 Ab High 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 High Income 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 Ab High i.e., Ab High and Payden Core go up and down completely randomly.
Pair Corralation between Ab High and Payden Core
Assuming the 90 days horizon Ab High Income is expected to generate 0.53 times more return on investment than Payden Core. However, Ab High Income is 1.89 times less risky than Payden Core. It trades about 0.26 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 697.00 in Ab High Income on August 29, 2024 and sell it today you would earn a total of 7.00 from holding Ab High Income or generate 1.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Ab High Income vs. Payden E Bond
Performance |
| Timeline |
| Ab High Income |
| Payden E Bond |
Ab High and Payden Core Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ab High and Payden Core
The main advantage of trading using opposite Ab High and Payden Core positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab High 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.| Ab High vs. Lgm Risk Managed | Ab High vs. Pace High Yield | Ab High vs. Copeland Risk Managed | Ab High vs. Ppm High Yield |
| 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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