Correlation Between Multi-manager High and Payden Corporate
Can any of the company-specific risk be diversified away by investing in both Multi-manager High and Payden Corporate 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 High and Payden Corporate 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 Corporate Bond, you can compare the effects of market volatilities on Multi-manager High and Payden Corporate 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 High with a short position of Payden Corporate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Multi-manager High and Payden Corporate.
Diversification Opportunities for Multi-manager High and Payden Corporate
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Multi-manager and Payden is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Multi Manager High Yield and Payden Corporate Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Payden Corporate Bond and Multi-manager High 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 Corporate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Payden Corporate Bond has no effect on the direction of Multi-manager High i.e., Multi-manager High and Payden Corporate go up and down completely randomly.
Pair Corralation between Multi-manager High and Payden Corporate
Assuming the 90 days horizon Multi Manager High Yield is expected to generate 0.44 times more return on investment than Payden Corporate. However, Multi Manager High Yield is 2.25 times less risky than Payden Corporate. It trades about 0.21 of its potential returns per unit of risk. Payden Corporate Bond is currently generating about 0.06 per unit of risk. If you would invest 784.00 in Multi Manager High Yield on November 3, 2024 and sell it today you would earn a total of 65.00 from holding Multi Manager High Yield or generate 8.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
Multi Manager High Yield vs. Payden Corporate Bond
Performance |
| Timeline |
| Multi Manager High |
| Payden Corporate Bond |
Multi-manager High and Payden Corporate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Multi-manager High and Payden Corporate
The main advantage of trading using opposite Multi-manager High and Payden Corporate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Multi-manager High position performs unexpectedly, Payden Corporate 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 Corporate will offset losses from the drop in Payden Corporate's long position.| Multi-manager High vs. Qs Moderate Growth | Multi-manager High vs. Qs Global Equity | Multi-manager High vs. Rbb Fund | Multi-manager High vs. Morningstar Global Income |
| Payden Corporate vs. L Abbett Growth | Payden Corporate vs. Morningstar Global Income | Payden Corporate vs. Growth Portfolio Class | Payden Corporate vs. Qs Large 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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