Correlation Between Payden California and Payden Absolute
Can any of the company-specific risk be diversified away by investing in both Payden California and Payden Absolute 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 California and Payden Absolute into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Payden California Municipal and Payden Absolute Return, you can compare the effects of market volatilities on Payden California and Payden Absolute 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 California with a short position of Payden Absolute. Check out your portfolio center. Please also check ongoing floating volatility patterns of Payden California and Payden Absolute.
Diversification Opportunities for Payden California and Payden Absolute
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Payden and Payden is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Payden California Municipal and Payden Absolute Return in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Payden Absolute Return and Payden California 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 California Municipal are associated (or correlated) with Payden Absolute. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Payden Absolute Return has no effect on the direction of Payden California i.e., Payden California and Payden Absolute go up and down completely randomly.
Pair Corralation between Payden California and Payden Absolute
Assuming the 90 days horizon Payden California is expected to generate 1.35 times less return on investment than Payden Absolute. In addition to that, Payden California is 2.0 times more volatile than Payden Absolute Return. It trades about 0.1 of its total potential returns per unit of risk. Payden Absolute Return is currently generating about 0.27 per unit of volatility. If you would invest 890.00 in Payden Absolute Return on September 2, 2024 and sell it today you would earn a total of 56.00 from holding Payden Absolute Return or generate 6.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Payden California Municipal vs. Payden Absolute Return
Performance |
| Timeline |
| Payden California |
| Payden Absolute Return |
Payden California and Payden Absolute Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Payden California and Payden Absolute
The main advantage of trading using opposite Payden California and Payden Absolute positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Payden California position performs unexpectedly, Payden Absolute 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 Absolute will offset losses from the drop in Payden Absolute's long position.| Payden California vs. Vanguard Growth And | Payden California vs. Qs Growth Fund | Payden California vs. Nationwide Growth Fund | Payden California vs. Kinetics Small Cap |
| Payden Absolute vs. Dunham Porategovernment Bond | Payden Absolute vs. Franklin Government Money | Payden Absolute vs. Ab Government Exchange | Payden Absolute vs. Fidelity Series Government |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
Other Complementary Tools
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges |