Correlation Between Payden Regal and Payden California
Can any of the company-specific risk be diversified away by investing in both Payden Regal and Payden California 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 Regal and Payden California into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Payden Regal and Payden California Muncipal, you can compare the effects of market volatilities on Payden Regal and Payden California 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 Regal with a short position of Payden California. Check out your portfolio center. Please also check ongoing floating volatility patterns of Payden Regal and Payden California.
Diversification Opportunities for Payden Regal and Payden California
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Payden and Payden is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding The Payden Regal and Payden California Muncipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Payden California and Payden Regal 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 The Payden Regal are associated (or correlated) with Payden California. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Payden California has no effect on the direction of Payden Regal i.e., Payden Regal and Payden California go up and down completely randomly.
Pair Corralation between Payden Regal and Payden California
Assuming the 90 days horizon The Payden Regal is expected to generate 1.05 times more return on investment than Payden California. However, Payden Regal is 1.05 times more volatile than Payden California Muncipal. It trades about 0.18 of its potential returns per unit of risk. Payden California Muncipal is currently generating about 0.05 per unit of risk. If you would invest 589.00 in The Payden Regal on August 25, 2024 and sell it today you would earn a total of 47.00 from holding The Payden Regal or generate 7.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Payden Regal vs. Payden California Muncipal
Performance |
| Timeline |
| Payden Regal |
| Payden California |
Payden Regal and Payden California Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Payden Regal and Payden California
The main advantage of trading using opposite Payden Regal and Payden California positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Payden Regal position performs unexpectedly, Payden California 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 California will offset losses from the drop in Payden California's long position.| Payden Regal vs. Payden Porate Bond | Payden Regal vs. Payden Absolute Return | Payden Regal vs. Payden Absolute Return | Payden Regal vs. Payden Emerging Markets |
| Payden California vs. Payden Porate Bond | Payden California vs. Payden Absolute Return | Payden California vs. Payden Absolute Return | Payden California 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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