Correlation Between Payden Corporate and Payden Global
Can any of the company-specific risk be diversified away by investing in both Payden Corporate and Payden Global 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 Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Payden Corporate Bond and Payden Global Fixed, you can compare the effects of market volatilities on Payden Corporate and Payden Global 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 Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Payden Corporate and Payden Global.
Diversification Opportunities for Payden Corporate and Payden Global
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Payden and Payden is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Payden Corporate Bond and Payden Global Fixed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Payden Global Fixed 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 Corporate Bond are associated (or correlated) with Payden Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Payden Global Fixed has no effect on the direction of Payden Corporate i.e., Payden Corporate and Payden Global go up and down completely randomly.
Pair Corralation between Payden Corporate and Payden Global
Assuming the 90 days horizon Payden Corporate Bond is expected to generate 1.48 times more return on investment than Payden Global. However, Payden Corporate is 1.48 times more volatile than Payden Global Fixed. It trades about 0.08 of its potential returns per unit of risk. Payden Global Fixed is currently generating about 0.11 per unit of risk. If you would invest 924.00 in Payden Corporate Bond on September 2, 2024 and sell it today you would earn a total of 73.00 from holding Payden Corporate Bond or generate 7.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Payden Corporate Bond vs. Payden Global Fixed
Performance |
| Timeline |
| Payden Corporate Bond |
| Payden Global Fixed |
Payden Corporate and Payden Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Payden Corporate and Payden Global
The main advantage of trading using opposite Payden Corporate and Payden Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Payden Corporate position performs unexpectedly, Payden Global 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 Global will offset losses from the drop in Payden Global's long position.| Payden Corporate vs. T Rowe Price | Payden Corporate vs. Harbor Diversified International | Payden Corporate vs. Jhancock Diversified Macro | Payden Corporate vs. Aqr Diversified Arbitrage |
| Payden Global vs. Payden Porate Bond | Payden Global vs. Payden Absolute Return | Payden Global vs. Payden Absolute Return | Payden Global 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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