Correlation Between NYSE Composite and Payden California
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Payden California 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 NYSE Composite and Payden California into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Payden California Muncipal, you can compare the effects of market volatilities on NYSE Composite and Payden California 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 NYSE Composite with a short position of Payden California. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Payden California.
Diversification Opportunities for NYSE Composite and Payden California
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between NYSE and Payden is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Payden California Muncipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Payden California and NYSE Composite 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 NYSE Composite are associated (or correlated) with Payden California. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Payden California has no effect on the direction of NYSE Composite i.e., NYSE Composite and Payden California go up and down completely randomly.
Pair Corralation between NYSE Composite and Payden California
Assuming the 90 days trading horizon NYSE Composite is expected to generate 2.97 times more return on investment than Payden California. However, NYSE Composite is 2.97 times more volatile than Payden California Muncipal. It trades about 0.19 of its potential returns per unit of risk. Payden California Muncipal is currently generating about 0.1 per unit of risk. If you would invest 1,956,073 in NYSE Composite on August 25, 2024 and sell it today you would earn a total of 56,272 from holding NYSE Composite or generate 2.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Payden California Muncipal
Performance |
| Timeline |
NYSE Composite and Payden California Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Payden California Muncipal
Pair trading matchups for Payden California
Pair Trading with NYSE Composite and Payden California
The main advantage of trading using opposite NYSE Composite and Payden California positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Payden California 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 California will offset losses from the drop in Payden California's long position.| NYSE Composite vs. Glacier Bancorp | NYSE Composite vs. LithiumBank Resources Corp | NYSE Composite vs. Stepstone Group | NYSE Composite vs. Pintec Technology Holdings |
| Payden California vs. Payden Porate Bond | Payden California vs. Payden Absolute Return | Payden California vs. Payden Absolute Return | Payden California vs. Payden Emerging Markets |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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