Correlation Between Payden Core and Payden Global
Can any of the company-specific risk be diversified away by investing in both Payden Core 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 Core 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 E Bond and Payden Global Fixed, you can compare the effects of market volatilities on Payden Core 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 Core with a short position of Payden Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Payden Core and Payden Global.
Diversification Opportunities for Payden Core and Payden Global
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Payden and Payden is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Payden E 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 Core 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 E 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 Core i.e., Payden Core and Payden Global go up and down completely randomly.
Pair Corralation between Payden Core and Payden Global
Assuming the 90 days horizon Payden Core is expected to generate 1.87 times less return on investment than Payden Global. In addition to that, Payden Core is 1.5 times more volatile than Payden Global Fixed. It trades about 0.09 of its total potential returns per unit of risk. Payden Global Fixed is currently generating about 0.25 per unit of volatility. If you would invest 760.00 in Payden Global Fixed on September 1, 2024 and sell it today you would earn a total of 9.00 from holding Payden Global Fixed or generate 1.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Payden E Bond vs. Payden Global Fixed
Performance |
| Timeline |
| Payden E Bond |
| Payden Global Fixed |
Payden Core and Payden Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Payden Core and Payden Global
The main advantage of trading using opposite Payden Core and Payden Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Payden Core 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 Core vs. T Rowe Price | Payden Core vs. Morningstar Unconstrained Allocation | Payden Core vs. Qs Large Cap | Payden Core vs. T Rowe Price |
| Payden Global vs. Small Pany Growth | Payden Global vs. Legg Mason Partners | Payden Global vs. L Abbett Growth | Payden Global vs. T Rowe Price |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
Other Complementary Tools
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios |