Correlation Between American Funds and Payden Floating
Can any of the company-specific risk be diversified away by investing in both American Funds and Payden Floating 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 American Funds and Payden Floating into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Funds Fundamental and Payden Floating Rate, you can compare the effects of market volatilities on American Funds and Payden Floating 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 American Funds with a short position of Payden Floating. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Funds and Payden Floating.
Diversification Opportunities for American Funds and Payden Floating
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between American and Payden is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding American Funds Fundamental and Payden Floating Rate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Payden Floating Rate and American Funds 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 American Funds Fundamental are associated (or correlated) with Payden Floating. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Payden Floating Rate has no effect on the direction of American Funds i.e., American Funds and Payden Floating go up and down completely randomly.
Pair Corralation between American Funds and Payden Floating
Assuming the 90 days horizon American Funds Fundamental is expected to generate 7.59 times more return on investment than Payden Floating. However, American Funds is 7.59 times more volatile than Payden Floating Rate. It trades about 0.2 of its potential returns per unit of risk. Payden Floating Rate is currently generating about 0.08 per unit of risk. If you would invest 8,096 in American Funds Fundamental on November 3, 2024 and sell it today you would earn a total of 322.00 from holding American Funds Fundamental or generate 3.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Funds Fundamental vs. Payden Floating Rate
Performance |
| Timeline |
| American Funds Funda |
| Payden Floating Rate |
American Funds and Payden Floating Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Funds and Payden Floating
The main advantage of trading using opposite American Funds and Payden Floating positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Funds position performs unexpectedly, Payden Floating 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 Floating will offset losses from the drop in Payden Floating's long position.| American Funds vs. World Energy Fund | American Funds vs. Energy Services Fund | American Funds vs. Alpsalerian Energy Infrastructure | American Funds vs. Icon Natural Resources |
| Payden Floating vs. Neuberger Berman Real | Payden Floating vs. Columbia Real Estate | Payden Floating vs. Redwood Real Estate | Payden Floating vs. Dunham Real Estate |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
Other Complementary Tools
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes |