Correlation Between Arrow Managed and Payden High
Can any of the company-specific risk be diversified away by investing in both Arrow Managed and Payden High 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 Arrow Managed and Payden High into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Arrow Managed Futures and Payden High Income, you can compare the effects of market volatilities on Arrow Managed and Payden High 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 Arrow Managed with a short position of Payden High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arrow Managed and Payden High.
Diversification Opportunities for Arrow Managed and Payden High
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Arrow and Payden is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Arrow Managed Futures and Payden High Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Payden High Income and Arrow Managed 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 Arrow Managed Futures are associated (or correlated) with Payden High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Payden High Income has no effect on the direction of Arrow Managed i.e., Arrow Managed and Payden High go up and down completely randomly.
Pair Corralation between Arrow Managed and Payden High
Assuming the 90 days horizon Arrow Managed Futures is expected to generate 5.28 times more return on investment than Payden High. However, Arrow Managed is 5.28 times more volatile than Payden High Income. It trades about 0.09 of its potential returns per unit of risk. Payden High Income is currently generating about -0.23 per unit of risk. If you would invest 549.00 in Arrow Managed Futures on September 21, 2024 and sell it today you would earn a total of 12.00 from holding Arrow Managed Futures or generate 2.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Arrow Managed Futures vs. Payden High Income
Performance |
| Timeline |
| Arrow Managed Futures |
| Payden High Income |
Arrow Managed and Payden High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Arrow Managed and Payden High
The main advantage of trading using opposite Arrow Managed and Payden High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arrow Managed position performs unexpectedly, Payden High 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 High will offset losses from the drop in Payden High's long position.| Arrow Managed vs. Scharf Global Opportunity | Arrow Managed vs. T Rowe Price | Arrow Managed vs. Balanced Fund Investor | Arrow Managed vs. Fa 529 Aggressive |
| Payden High vs. Arrow Managed Futures | Payden High vs. Balanced Fund Investor | Payden High vs. T Rowe Price | Payden High vs. Rbb Fund |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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