Correlation Between Payden Emerging and Payden Corporate
Can any of the company-specific risk be diversified away by investing in both Payden Emerging 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 Emerging 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 Emerging Markets and Payden Corporate Bond, you can compare the effects of market volatilities on Payden Emerging 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 Emerging with a short position of Payden Corporate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Payden Emerging and Payden Corporate.
Diversification Opportunities for Payden Emerging and Payden Corporate
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Payden and Payden is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Payden Emerging Markets 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 Emerging 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 Emerging Markets 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 Emerging i.e., Payden Emerging and Payden Corporate go up and down completely randomly.
Pair Corralation between Payden Emerging and Payden Corporate
Assuming the 90 days horizon Payden Emerging Markets is expected to generate 0.41 times more return on investment than Payden Corporate. However, Payden Emerging Markets is 2.43 times less risky than Payden Corporate. It trades about 0.24 of its potential returns per unit of risk. Payden Corporate Bond is currently generating about 0.08 per unit of risk. If you would invest 827.00 in Payden Emerging Markets on September 1, 2024 and sell it today you would earn a total of 54.00 from holding Payden Emerging Markets or generate 6.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.47% |
| Values | Daily Returns |
Payden Emerging Markets vs. Payden Corporate Bond
Performance |
| Timeline |
| Payden Emerging Markets |
| Payden Corporate Bond |
Payden Emerging and Payden Corporate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Payden Emerging and Payden Corporate
The main advantage of trading using opposite Payden Emerging and Payden Corporate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Payden Emerging 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 Emerging vs. Investec Emerging Markets | Payden Emerging vs. Siit Emerging Markets | Payden Emerging vs. Rbc Emerging Markets | Payden Emerging vs. Transamerica Emerging Markets |
| Payden Corporate vs. Vanguard Total Stock | Payden Corporate vs. Vanguard 500 Index | Payden Corporate vs. Vanguard Total Stock | Payden Corporate vs. Vanguard Total Stock |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
Other Complementary Tools
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. |