Correlation Between Vy(r) Baron and Payden Government
Can any of the company-specific risk be diversified away by investing in both Vy(r) Baron and Payden Government 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 Vy(r) Baron and Payden Government into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vy Baron Growth and Payden Government Fund, you can compare the effects of market volatilities on Vy(r) Baron and Payden Government 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 Vy(r) Baron with a short position of Payden Government. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vy(r) Baron and Payden Government.
Diversification Opportunities for Vy(r) Baron and Payden Government
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Vy(r) and Payden is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Vy Baron Growth and Payden Government Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Payden Government and Vy(r) Baron 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 Vy Baron Growth are associated (or correlated) with Payden Government. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Payden Government has no effect on the direction of Vy(r) Baron i.e., Vy(r) Baron and Payden Government go up and down completely randomly.
Pair Corralation between Vy(r) Baron and Payden Government
Assuming the 90 days horizon Vy Baron Growth is expected to generate 6.16 times more return on investment than Payden Government. However, Vy(r) Baron is 6.16 times more volatile than Payden Government Fund. It trades about 0.2 of its potential returns per unit of risk. Payden Government Fund is currently generating about 0.07 per unit of risk. If you would invest 2,329 in Vy Baron Growth on November 3, 2024 and sell it today you would earn a total of 88.00 from holding Vy Baron Growth or generate 3.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vy Baron Growth vs. Payden Government Fund
Performance |
| Timeline |
| Vy Baron Growth |
| Payden Government |
Vy(r) Baron and Payden Government Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vy(r) Baron and Payden Government
The main advantage of trading using opposite Vy(r) Baron and Payden Government positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vy(r) Baron position performs unexpectedly, Payden Government 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 Government will offset losses from the drop in Payden Government's long position.| Vy(r) Baron vs. Highland Longshort Healthcare | Vy(r) Baron vs. Eventide Healthcare Life | Vy(r) Baron vs. Alger Health Sciences | Vy(r) Baron vs. The Gabelli Healthcare |
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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 Global Correlations module to find global opportunities by holding instruments from different markets.
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