Correlation Between Payden Absolute and Dunham Large
Can any of the company-specific risk be diversified away by investing in both Payden Absolute and Dunham Large 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 Dunham Large 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 Dunham Large Cap, you can compare the effects of market volatilities on Payden Absolute and Dunham Large 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 Dunham Large. Check out your portfolio center. Please also check ongoing floating volatility patterns of Payden Absolute and Dunham Large.
Diversification Opportunities for Payden Absolute and Dunham Large
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Payden and Dunham is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Payden Absolute Return and Dunham Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dunham Large 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 Dunham Large. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dunham Large Cap has no effect on the direction of Payden Absolute i.e., Payden Absolute and Dunham Large go up and down completely randomly.
Pair Corralation between Payden Absolute and Dunham Large
Assuming the 90 days horizon Payden Absolute Return is expected to under-perform the Dunham Large. But the mutual fund apears to be less risky and, when comparing its historical volatility, Payden Absolute Return is 3.57 times less risky than Dunham Large. The mutual fund trades about -0.13 of its potential returns per unit of risk. The Dunham Large Cap is currently generating about 0.37 of returns per unit of risk over similar time horizon. If you would invest 1,880 in Dunham Large Cap on September 3, 2024 and sell it today you would earn a total of 103.00 from holding Dunham Large Cap or generate 5.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Payden Absolute Return vs. Dunham Large Cap
Performance |
| Timeline |
| Payden Absolute Return |
| Dunham Large Cap |
Payden Absolute and Dunham Large Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Payden Absolute and Dunham Large
The main advantage of trading using opposite Payden Absolute and Dunham Large positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Payden Absolute position performs unexpectedly, Dunham Large 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 Dunham Large will offset losses from the drop in Dunham Large's long position.| Payden Absolute vs. Blackrock Strategic Opps | Payden Absolute vs. Blackrock Strategic Income | Payden Absolute vs. Jpmorgan Strategic Income | Payden Absolute vs. Jpmorgan Strategic Income |
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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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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