Correlation Between Ab All and Payden Absolute
Can any of the company-specific risk be diversified away by investing in both Ab All and Payden Absolute 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 All and Payden Absolute into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ab All Market and Payden Absolute Return, you can compare the effects of market volatilities on Ab All and Payden Absolute 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 All with a short position of Payden Absolute. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab All and Payden Absolute.
Diversification Opportunities for Ab All and Payden Absolute
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between AMTOX and Payden is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Ab All Market and Payden Absolute Return in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Payden Absolute Return and Ab All 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 All Market are associated (or correlated) with Payden Absolute. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Payden Absolute Return has no effect on the direction of Ab All i.e., Ab All and Payden Absolute go up and down completely randomly.
Pair Corralation between Ab All and Payden Absolute
Assuming the 90 days horizon Ab All Market is expected to generate 7.9 times more return on investment than Payden Absolute. However, Ab All is 7.9 times more volatile than Payden Absolute Return. It trades about 0.06 of its potential returns per unit of risk. Payden Absolute Return is currently generating about 0.3 per unit of risk. If you would invest 817.00 in Ab All Market on November 3, 2024 and sell it today you would earn a total of 83.00 from holding Ab All Market or generate 10.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ab All Market vs. Payden Absolute Return
Performance |
| Timeline |
| Ab All Market |
| Payden Absolute Return |
Ab All and Payden Absolute Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ab All and Payden Absolute
The main advantage of trading using opposite Ab All and Payden Absolute positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab All position performs unexpectedly, Payden Absolute 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 Absolute will offset losses from the drop in Payden Absolute's long position.| Ab All vs. Fidelity Capital Income | Ab All vs. Guggenheim High Yield | Ab All vs. Gmo High Yield | Ab All vs. Virtus High Yield |
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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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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