Correlation Between Dunham Corporate/govern and Payden Strategic
Can any of the company-specific risk be diversified away by investing in both Dunham Corporate/govern and Payden Strategic 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 Dunham Corporate/govern and Payden Strategic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dunham Porategovernment Bond and Payden Strategic Income, you can compare the effects of market volatilities on Dunham Corporate/govern and Payden Strategic 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 Dunham Corporate/govern with a short position of Payden Strategic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dunham Corporate/govern and Payden Strategic.
Diversification Opportunities for Dunham Corporate/govern and Payden Strategic
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Dunham and Payden is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Dunham Porategovernment Bond and Payden Strategic Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Payden Strategic Income and Dunham Corporate/govern 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 Dunham Porategovernment Bond are associated (or correlated) with Payden Strategic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Payden Strategic Income has no effect on the direction of Dunham Corporate/govern i.e., Dunham Corporate/govern and Payden Strategic go up and down completely randomly.
Pair Corralation between Dunham Corporate/govern and Payden Strategic
Assuming the 90 days horizon Dunham Corporate/govern is expected to generate 1.68 times less return on investment than Payden Strategic. In addition to that, Dunham Corporate/govern is 1.7 times more volatile than Payden Strategic Income. It trades about 0.04 of its total potential returns per unit of risk. Payden Strategic Income is currently generating about 0.12 per unit of volatility. If you would invest 862.00 in Payden Strategic Income on September 3, 2024 and sell it today you would earn a total of 103.00 from holding Payden Strategic Income or generate 11.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dunham Porategovernment Bond vs. Payden Strategic Income
Performance |
| Timeline |
| Dunham Porategovernment |
| Payden Strategic Income |
Dunham Corporate/govern and Payden Strategic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dunham Corporate/govern and Payden Strategic
The main advantage of trading using opposite Dunham Corporate/govern and Payden Strategic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dunham Corporate/govern position performs unexpectedly, Payden Strategic 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 Strategic will offset losses from the drop in Payden Strategic's long position.| Dunham Corporate/govern vs. Ab Global Risk | Dunham Corporate/govern vs. Legg Mason Global | Dunham Corporate/govern vs. Artisan Global Unconstrained | Dunham Corporate/govern vs. Scharf Global Opportunity |
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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 Transaction History module to view history of all your transactions and understand their impact on performance.
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