Correlation Between Payden Floating and Payden Corporate
Can any of the company-specific risk be diversified away by investing in both Payden Floating and Payden Corporate 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 Floating and Payden Corporate into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Payden Floating Rate and Payden Corporate Bond, you can compare the effects of market volatilities on Payden Floating and Payden Corporate 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 Floating with a short position of Payden Corporate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Payden Floating and Payden Corporate.
Diversification Opportunities for Payden Floating and Payden Corporate
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Payden and Payden is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Payden Floating Rate and Payden Corporate Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Payden Corporate Bond and Payden Floating 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 Floating Rate are associated (or correlated) with Payden Corporate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Payden Corporate Bond has no effect on the direction of Payden Floating i.e., Payden Floating and Payden Corporate go up and down completely randomly.
Pair Corralation between Payden Floating and Payden Corporate
Assuming the 90 days horizon Payden Floating Rate is expected to generate 0.15 times more return on investment than Payden Corporate. However, Payden Floating Rate is 6.49 times less risky than Payden Corporate. It trades about 0.78 of its potential returns per unit of risk. Payden Corporate Bond is currently generating about 0.05 per unit of risk. If you would invest 974.00 in Payden Floating Rate on October 23, 2024 and sell it today you would earn a total of 7.00 from holding Payden Floating Rate or generate 0.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Payden Floating Rate vs. Payden Corporate Bond
Performance |
| Timeline |
| Payden Floating Rate |
| Payden Corporate Bond |
Payden Floating and Payden Corporate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Payden Floating and Payden Corporate
The main advantage of trading using opposite Payden Floating and Payden Corporate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Payden Floating position performs unexpectedly, Payden Corporate 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 Corporate will offset losses from the drop in Payden Corporate's long position.| Payden Floating vs. T Rowe Price | Payden Floating vs. Issachar Fund Class | Payden Floating vs. Ab Global Bond | Payden Floating vs. Rbb Fund |
| Payden Corporate vs. Ab High Income | Payden Corporate vs. Virtus High Yield | Payden Corporate vs. Multi Manager High Yield | Payden Corporate vs. Lord Abbett Short |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
Other Complementary Tools
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Stocks Directory Find actively traded stocks across global markets | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. |