Correlation Between Payden Absolute and Cullen Small
Can any of the company-specific risk be diversified away by investing in both Payden Absolute and Cullen Small 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 Absolute and Cullen Small into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Payden Absolute Return and Cullen Small Cap, you can compare the effects of market volatilities on Payden Absolute and Cullen Small 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 Absolute with a short position of Cullen Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Payden Absolute and Cullen Small.
Diversification Opportunities for Payden Absolute and Cullen Small
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Payden and Cullen is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Payden Absolute Return and Cullen Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cullen Small Cap and Payden Absolute 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 Absolute Return are associated (or correlated) with Cullen Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cullen Small Cap has no effect on the direction of Payden Absolute i.e., Payden Absolute and Cullen Small go up and down completely randomly.
Pair Corralation between Payden Absolute and Cullen Small
Assuming the 90 days horizon Payden Absolute Return is expected to under-perform the Cullen Small. But the mutual fund apears to be less risky and, when comparing its historical volatility, Payden Absolute Return is 9.57 times less risky than Cullen Small. The mutual fund trades about -0.12 of its potential returns per unit of risk. The Cullen Small Cap is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 1,480 in Cullen Small Cap on August 30, 2024 and sell it today you would earn a total of 96.00 from holding Cullen Small Cap or generate 6.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Payden Absolute Return vs. Cullen Small Cap
Performance |
| Timeline |
| Payden Absolute Return |
| Cullen Small Cap |
Payden Absolute and Cullen Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Payden Absolute and Cullen Small
The main advantage of trading using opposite Payden Absolute and Cullen Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Payden Absolute position performs unexpectedly, Cullen Small 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 Cullen Small will offset losses from the drop in Cullen Small's long position.| Payden Absolute vs. Dreyfus Government Cash | Payden Absolute vs. Prudential Government Income | Payden Absolute vs. Dws Government Money | Payden Absolute vs. Us Government Securities |
| Cullen Small vs. Cullen Small Cap | Cullen Small vs. Astoncrosswind Small Cap | Cullen Small vs. Cullen Small Cap | Cullen Small vs. Cullen High Dividend |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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