Correlation Between Payden Absolute and Fuller Thaler
Can any of the company-specific risk be diversified away by investing in both Payden Absolute and Fuller Thaler 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 Fuller Thaler 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 Fuller Thaler Behavioral, you can compare the effects of market volatilities on Payden Absolute and Fuller Thaler 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 Fuller Thaler. Check out your portfolio center. Please also check ongoing floating volatility patterns of Payden Absolute and Fuller Thaler.
Diversification Opportunities for Payden Absolute and Fuller Thaler
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Payden and Fuller is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Payden Absolute Return and Fuller Thaler Behavioral in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fuller Thaler Behavioral 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 Fuller Thaler. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fuller Thaler Behavioral has no effect on the direction of Payden Absolute i.e., Payden Absolute and Fuller Thaler go up and down completely randomly.
Pair Corralation between Payden Absolute and Fuller Thaler
Assuming the 90 days horizon Payden Absolute is expected to generate 3.46 times less return on investment than Fuller Thaler. But when comparing it to its historical volatility, Payden Absolute Return is 9.09 times less risky than Fuller Thaler. It trades about 0.21 of its potential returns per unit of risk. Fuller Thaler Behavioral is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 3,508 in Fuller Thaler Behavioral on August 29, 2024 and sell it today you would earn a total of 1,748 from holding Fuller Thaler Behavioral or generate 49.83% 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. Fuller Thaler Behavioral
Performance |
| Timeline |
| Payden Absolute Return |
| Fuller Thaler Behavioral |
Payden Absolute and Fuller Thaler Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Payden Absolute and Fuller Thaler
The main advantage of trading using opposite Payden Absolute and Fuller Thaler positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Payden Absolute position performs unexpectedly, Fuller Thaler 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 Fuller Thaler will offset losses from the drop in Fuller Thaler's long position.| Payden Absolute vs. Payden Porate Bond | Payden Absolute vs. Payden Emerging Markets | Payden Absolute vs. The Payden Regal | Payden Absolute vs. Payden E Bond |
| Fuller Thaler vs. Fuller Thaler Behavioral | Fuller Thaler vs. Fuller Thaler Behavioral | Fuller Thaler vs. Fuller Thaler Behavioral |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
Other Complementary Tools
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Equity Valuation Check real value of public entities based on technical and fundamental data |