Correlation Between Eic Value and Payden Emerging
Can any of the company-specific risk be diversified away by investing in both Eic Value and Payden Emerging 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 Eic Value and Payden Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eic Value Fund and Payden Emerging Markets, you can compare the effects of market volatilities on Eic Value and Payden Emerging 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 Eic Value with a short position of Payden Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eic Value and Payden Emerging.
Diversification Opportunities for Eic Value and Payden Emerging
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Eic and Payden is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Eic Value Fund and Payden Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Payden Emerging Markets and Eic Value 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 Eic Value Fund are associated (or correlated) with Payden Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Payden Emerging Markets has no effect on the direction of Eic Value i.e., Eic Value and Payden Emerging go up and down completely randomly.
Pair Corralation between Eic Value and Payden Emerging
Assuming the 90 days horizon Eic Value Fund is expected to generate 2.04 times more return on investment than Payden Emerging. However, Eic Value is 2.04 times more volatile than Payden Emerging Markets. It trades about 0.08 of its potential returns per unit of risk. Payden Emerging Markets is currently generating about 0.1 per unit of risk. If you would invest 1,477 in Eic Value Fund on September 3, 2024 and sell it today you would earn a total of 445.00 from holding Eic Value Fund or generate 30.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eic Value Fund vs. Payden Emerging Markets
Performance |
| Timeline |
| Eic Value Fund |
| Payden Emerging Markets |
Eic Value and Payden Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eic Value and Payden Emerging
The main advantage of trading using opposite Eic Value and Payden Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eic Value position performs unexpectedly, Payden Emerging 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 Emerging will offset losses from the drop in Payden Emerging's long position.| Eic Value vs. Tax Managed Mid Small | Eic Value vs. Legg Mason Bw | Eic Value vs. Jhancock Diversified Macro | Eic Value vs. Davenport Small Cap |
| Payden Emerging vs. Auer Growth Fund | Payden Emerging vs. Qs Growth Fund | Payden Emerging vs. Eic Value Fund | Payden Emerging vs. Issachar Fund Class |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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