Correlation Between Fa 529 and Payden Floating
Can any of the company-specific risk be diversified away by investing in both Fa 529 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 Fa 529 and Payden Floating into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fa 529 Aggressive and Payden Floating Rate, you can compare the effects of market volatilities on Fa 529 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 Fa 529 with a short position of Payden Floating. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fa 529 and Payden Floating.
Diversification Opportunities for Fa 529 and Payden Floating
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between FFCGX and Payden is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Fa 529 Aggressive 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 Fa 529 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 Fa 529 Aggressive 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 Fa 529 i.e., Fa 529 and Payden Floating go up and down completely randomly.
Pair Corralation between Fa 529 and Payden Floating
Assuming the 90 days horizon Fa 529 is expected to generate 1.3 times less return on investment than Payden Floating. In addition to that, Fa 529 is 3.3 times more volatile than Payden Floating Rate. It trades about 0.02 of its total potential returns per unit of risk. Payden Floating Rate is currently generating about 0.09 per unit of volatility. If you would invest 979.00 in Payden Floating Rate on September 12, 2024 and sell it today you would earn a total of 3.00 from holding Payden Floating Rate or generate 0.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Fa 529 Aggressive vs. Payden Floating Rate
Performance |
| Timeline |
| Fa 529 Aggressive |
| Payden Floating Rate |
Fa 529 and Payden Floating Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fa 529 and Payden Floating
The main advantage of trading using opposite Fa 529 and Payden Floating positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fa 529 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.| Fa 529 vs. Artisan High Income | Fa 529 vs. Pace High Yield | Fa 529 vs. Multisector Bond Sma | Fa 529 vs. California Bond Fund |
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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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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