Correlation Between NYSE Composite and Payden Low
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Payden Low 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 Low 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 Low Duration, you can compare the effects of market volatilities on NYSE Composite and Payden Low 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 Low. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Payden Low.
Diversification Opportunities for NYSE Composite and Payden Low
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between NYSE and Payden is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Payden Low Duration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Payden Low Duration 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 Low. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Payden Low Duration has no effect on the direction of NYSE Composite i.e., NYSE Composite and Payden Low go up and down completely randomly.
Pair Corralation between NYSE Composite and Payden Low
Assuming the 90 days trading horizon NYSE Composite is expected to generate 5.91 times more return on investment than Payden Low. However, NYSE Composite is 5.91 times more volatile than Payden Low Duration. It trades about 0.42 of its potential returns per unit of risk. Payden Low Duration is currently generating about 0.05 per unit of risk. If you would invest 1,923,895 in NYSE Composite on September 1, 2024 and sell it today you would earn a total of 103,309 from holding NYSE Composite or generate 5.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
NYSE Composite vs. Payden Low Duration
Performance |
| Timeline |
NYSE Composite and Payden Low Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Payden Low Duration
Pair trading matchups for Payden Low
Pair Trading with NYSE Composite and Payden Low
The main advantage of trading using opposite NYSE Composite and Payden Low positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Payden Low 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 Low will offset losses from the drop in Payden Low's long position.| NYSE Composite vs. Acumen Pharmaceuticals | NYSE Composite vs. Mind Medicine | NYSE Composite vs. NL Industries | NYSE Composite vs. Ecovyst |
| Payden Low vs. Vanguard Developed Markets | Payden Low vs. Aqr Long Short Equity | Payden Low vs. Sp Midcap Index | Payden Low vs. Artisan 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
Other Complementary Tools
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital |