Correlation Between New Perspective and Payden Absolute
Can any of the company-specific risk be diversified away by investing in both New Perspective 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 New Perspective and Payden Absolute into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between New Perspective Fund and Payden Absolute Return, you can compare the effects of market volatilities on New Perspective 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 New Perspective with a short position of Payden Absolute. Check out your portfolio center. Please also check ongoing floating volatility patterns of New Perspective and Payden Absolute.
Diversification Opportunities for New Perspective and Payden Absolute
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between New and Payden is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding New Perspective Fund 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 New Perspective 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 New Perspective Fund 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 New Perspective i.e., New Perspective and Payden Absolute go up and down completely randomly.
Pair Corralation between New Perspective and Payden Absolute
Assuming the 90 days horizon New Perspective Fund is expected to generate 11.35 times more return on investment than Payden Absolute. However, New Perspective is 11.35 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 0.32 per unit of risk. If you would invest 5,729 in New Perspective Fund on November 3, 2024 and sell it today you would earn a total of 753.00 from holding New Perspective Fund or generate 13.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
New Perspective Fund vs. Payden Absolute Return
Performance |
| Timeline |
| New Perspective |
| Payden Absolute Return |
New Perspective and Payden Absolute Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with New Perspective and Payden Absolute
The main advantage of trading using opposite New Perspective and Payden Absolute positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if New Perspective 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.| New Perspective vs. Growth Fund Of | New Perspective vs. American Funds Fundamental | New Perspective vs. Investment Of America | New Perspective vs. Smallcap World Fund |
| Payden Absolute vs. Health Care Ultrasector | Payden Absolute vs. Live Oak Health | Payden Absolute vs. Hartford Healthcare Hls | Payden Absolute vs. Lord Abbett Health |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
Other Complementary Tools
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Transaction History View history of all your transactions and understand their impact on performance |