Correlation Between Aew Real and Payden Government
Can any of the company-specific risk be diversified away by investing in both Aew Real 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 Aew Real and Payden Government into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aew Real Estate and Payden Government Fund, you can compare the effects of market volatilities on Aew Real 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 Aew Real with a short position of Payden Government. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aew Real and Payden Government.
Diversification Opportunities for Aew Real and Payden Government
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Aew and Payden is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Aew Real Estate and Payden Government Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Payden Government and Aew Real 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 Aew Real Estate 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 Aew Real i.e., Aew Real and Payden Government go up and down completely randomly.
Pair Corralation between Aew Real and Payden Government
Assuming the 90 days horizon Aew Real Estate is expected to under-perform the Payden Government. In addition to that, Aew Real is 5.5 times more volatile than Payden Government Fund. It trades about -0.07 of its total potential returns per unit of risk. Payden Government Fund is currently generating about 0.19 per unit of volatility. If you would invest 936.00 in Payden Government Fund on September 14, 2024 and sell it today you would earn a total of 4.00 from holding Payden Government Fund or generate 0.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aew Real Estate vs. Payden Government Fund
Performance |
| Timeline |
| Aew Real Estate |
| Payden Government |
Aew Real and Payden Government Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aew Real and Payden Government
The main advantage of trading using opposite Aew Real and Payden Government positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aew Real 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.| Aew Real vs. Payden Government Fund | Aew Real vs. Us Government Securities | Aew Real vs. Dws Government Money | Aew Real vs. Hsbc Government Money |
| Payden Government vs. Vy Clarion Real | Payden Government vs. Amg Managers Centersquare | Payden Government vs. Short Real Estate | Payden Government vs. Virtus Real Estate |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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