Correlation Between Payden California and Payden Global
Can any of the company-specific risk be diversified away by investing in both Payden California 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 California 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 California Municipal and Payden Global Fixed, you can compare the effects of market volatilities on Payden California 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 California with a short position of Payden Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Payden California and Payden Global.
Diversification Opportunities for Payden California and Payden Global
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Payden and Payden is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Payden California Municipal 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 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 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 California i.e., Payden California and Payden Global go up and down completely randomly.
Pair Corralation between Payden California and Payden Global
Assuming the 90 days horizon Payden California is expected to generate 1.3 times less return on investment than Payden Global. In addition to that, Payden California is 1.05 times more volatile than Payden Global Fixed. It trades about 0.23 of its total potential returns per unit of risk. Payden Global Fixed is currently generating about 0.31 per unit of volatility. If you would invest 760.00 in Payden Global Fixed on September 2, 2024 and sell it today you would earn a total of 11.00 from holding Payden Global Fixed or generate 1.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Payden California Municipal vs. Payden Global Fixed
Performance |
| Timeline |
| Payden California |
| Payden Global Fixed |
Payden California and Payden Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Payden California and Payden Global
The main advantage of trading using opposite Payden California and Payden Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Payden California 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 California vs. Vanguard Growth And | Payden California vs. Qs Growth Fund | Payden California vs. Nationwide Growth Fund | Payden California vs. Kinetics Small Cap |
| Payden Global vs. Payden Porate Bond | Payden Global vs. Payden Absolute Return | Payden Global vs. Payden Absolute Return | Payden Global 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
Other Complementary Tools
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device |