Correlation Between Payden Absolute and Sierra Tactical
Can any of the company-specific risk be diversified away by investing in both Payden Absolute and Sierra Tactical 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 Sierra Tactical 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 Sierra Tactical Municipal, you can compare the effects of market volatilities on Payden Absolute and Sierra Tactical 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 Sierra Tactical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Payden Absolute and Sierra Tactical.
Diversification Opportunities for Payden Absolute and Sierra Tactical
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Payden and Sierra is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Payden Absolute Return and Sierra Tactical Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sierra Tactical Municipal 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 Sierra Tactical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sierra Tactical Municipal has no effect on the direction of Payden Absolute i.e., Payden Absolute and Sierra Tactical go up and down completely randomly.
Pair Corralation between Payden Absolute and Sierra Tactical
Assuming the 90 days horizon Payden Absolute is expected to generate 2.51 times less return on investment than Sierra Tactical. But when comparing it to its historical volatility, Payden Absolute Return is 5.15 times less risky than Sierra Tactical. It trades about 0.21 of its potential returns per unit of risk. Sierra Tactical Municipal is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 2,549 in Sierra Tactical Municipal on August 26, 2024 and sell it today you would earn a total of 20.00 from holding Sierra Tactical Municipal or generate 0.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Payden Absolute Return vs. Sierra Tactical Municipal
Performance |
| Timeline |
| Payden Absolute Return |
| Sierra Tactical Municipal |
Payden Absolute and Sierra Tactical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Payden Absolute and Sierra Tactical
The main advantage of trading using opposite Payden Absolute and Sierra Tactical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Payden Absolute position performs unexpectedly, Sierra Tactical 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 Sierra Tactical will offset losses from the drop in Sierra Tactical's long position.| Payden Absolute vs. Gmo Emerging Country | Payden Absolute vs. Artisan Emerging Markets | Payden Absolute vs. Chartwell Short Duration | Payden Absolute vs. Bbh Intermediate Municipal |
| Sierra Tactical vs. Aig Government Money | Sierra Tactical vs. Short Term Government Fund | Sierra Tactical vs. John Hancock Government | Sierra Tactical vs. Dws Government Money |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
Other Complementary Tools
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Transaction History View history of all your transactions and understand their impact on performance |