Correlation Between Payden Corporate and Payden Limited
Can any of the company-specific risk be diversified away by investing in both Payden Corporate and Payden Limited 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 Payden Corporate and Payden Limited into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Payden Porate Bond and Payden Limited Maturity, you can compare the effects of market volatilities on Payden Corporate and Payden Limited 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 Payden Corporate with a short position of Payden Limited. Check out your portfolio center. Please also check ongoing floating volatility patterns of Payden Corporate and Payden Limited.
Diversification Opportunities for Payden Corporate and Payden Limited
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Payden and Payden is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Payden Porate Bond and Payden Limited Maturity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Payden Limited Maturity and Payden Corporate 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 Payden Porate Bond are associated (or correlated) with Payden Limited. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Payden Limited Maturity has no effect on the direction of Payden Corporate i.e., Payden Corporate and Payden Limited go up and down completely randomly.
Pair Corralation between Payden Corporate and Payden Limited
If you would invest 974.00 in Payden Porate Bond on September 2, 2024 and sell it today you would earn a total of 15.00 from holding Payden Porate Bond or generate 1.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Payden Porate Bond vs. Payden Limited Maturity
Performance |
| Timeline |
| Payden Porate Bond |
| Payden Limited Maturity |
Payden Corporate and Payden Limited Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Payden Corporate and Payden Limited
The main advantage of trading using opposite Payden Corporate and Payden Limited positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Payden Corporate position performs unexpectedly, Payden Limited 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 Limited will offset losses from the drop in Payden Limited's long position.| Payden Corporate vs. Siit High Yield | Payden Corporate vs. California High Yield Municipal | Payden Corporate vs. Western Asset High | Payden Corporate vs. Artisan High Income |
| Payden Limited vs. Payden Porate Bond | Payden Limited vs. Payden Absolute Return | Payden Limited vs. Payden Absolute Return | Payden Limited 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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