Correlation Between Fa 529 and Payden Gnma
Can any of the company-specific risk be diversified away by investing in both Fa 529 and Payden Gnma 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 Gnma 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 Gnma Fund, you can compare the effects of market volatilities on Fa 529 and Payden Gnma 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 Gnma. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fa 529 and Payden Gnma.
Diversification Opportunities for Fa 529 and Payden Gnma
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 Gnma Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Payden Gnma Fund 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 Gnma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Payden Gnma Fund has no effect on the direction of Fa 529 i.e., Fa 529 and Payden Gnma go up and down completely randomly.
Pair Corralation between Fa 529 and Payden Gnma
Assuming the 90 days horizon Fa 529 Aggressive is expected to generate 2.22 times more return on investment than Payden Gnma. However, Fa 529 is 2.22 times more volatile than Payden Gnma Fund. It trades about 0.22 of its potential returns per unit of risk. Payden Gnma Fund is currently generating about 0.05 per unit of risk. If you would invest 3,908 in Fa 529 Aggressive on November 3, 2024 and sell it today you would earn a total of 151.00 from holding Fa 529 Aggressive or generate 3.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Fa 529 Aggressive vs. Payden Gnma Fund
Performance |
| Timeline |
| Fa 529 Aggressive |
| Payden Gnma Fund |
Fa 529 and Payden Gnma Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fa 529 and Payden Gnma
The main advantage of trading using opposite Fa 529 and Payden Gnma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fa 529 position performs unexpectedly, Payden Gnma 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 Gnma will offset losses from the drop in Payden Gnma's long position.| Fa 529 vs. Vanguard Total Stock | Fa 529 vs. Vanguard 500 Index | Fa 529 vs. Vanguard Total Stock | Fa 529 vs. Vanguard Total Stock |
| Payden Gnma vs. Vanguard Short Term Treasury | Payden Gnma vs. Vanguard Long Term Treasury | Payden Gnma vs. Vanguard Short Term Federal | Payden Gnma vs. Vanguard Intermediate Term Investment Grade |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
Other Complementary Tools
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal |