Correlation Between Multi Manager and Payden Absolute
Can any of the company-specific risk be diversified away by investing in both Multi Manager and Payden Absolute 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 Multi Manager and Payden Absolute into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Multi Manager High Yield and Payden Absolute Return, you can compare the effects of market volatilities on Multi Manager and Payden Absolute 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 Multi Manager with a short position of Payden Absolute. Check out your portfolio center. Please also check ongoing floating volatility patterns of Multi Manager and Payden Absolute.
Diversification Opportunities for Multi Manager and Payden Absolute
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Multi and Payden is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Multi Manager High Yield and Payden Absolute Return in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Payden Absolute Return and Multi Manager 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 Multi Manager High Yield are associated (or correlated) with Payden Absolute. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Payden Absolute Return has no effect on the direction of Multi Manager i.e., Multi Manager and Payden Absolute go up and down completely randomly.
Pair Corralation between Multi Manager and Payden Absolute
Assuming the 90 days horizon Multi Manager High Yield is expected to generate 1.74 times more return on investment than Payden Absolute. However, Multi Manager is 1.74 times more volatile than Payden Absolute Return. It trades about 0.4 of its potential returns per unit of risk. Payden Absolute Return is currently generating about 0.31 per unit of risk. If you would invest 837.00 in Multi Manager High Yield on October 25, 2024 and sell it today you would earn a total of 10.00 from holding Multi Manager High Yield or generate 1.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Multi Manager High Yield vs. Payden Absolute Return
Performance |
| Timeline |
| Multi Manager High |
| Payden Absolute Return |
Multi Manager and Payden Absolute Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Multi Manager and Payden Absolute
The main advantage of trading using opposite Multi Manager and Payden Absolute positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Multi Manager position performs unexpectedly, Payden Absolute 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 Absolute will offset losses from the drop in Payden Absolute's long position.| Multi Manager vs. Jhancock Real Estate | Multi Manager vs. Tiaa Cref Real Estate | Multi Manager vs. Commonwealth Real Estate | Multi Manager vs. Vanguard Reit Index |
| Payden Absolute vs. Vanguard Small Cap Value | Payden Absolute vs. Ultrasmall Cap Profund Ultrasmall Cap | Payden Absolute vs. Lord Abbett Small | Payden Absolute vs. Ab Small Cap |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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