Correlation Between Payden Core and Transamerica Emerging
Can any of the company-specific risk be diversified away by investing in both Payden Core and Transamerica Emerging 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 Transamerica Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Payden Core Bond and Transamerica Emerging Markets, you can compare the effects of market volatilities on Payden Core and Transamerica Emerging 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 Transamerica Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Payden Core and Transamerica Emerging.
Diversification Opportunities for Payden Core and Transamerica Emerging
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Payden and Transamerica is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Payden Core Bond and Transamerica Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Transamerica Emerging 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 Core Bond are associated (or correlated) with Transamerica Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Transamerica Emerging has no effect on the direction of Payden Core i.e., Payden Core and Transamerica Emerging go up and down completely randomly.
Pair Corralation between Payden Core and Transamerica Emerging
Assuming the 90 days horizon Payden Core Bond is expected to generate 0.38 times more return on investment than Transamerica Emerging. However, Payden Core Bond is 2.62 times less risky than Transamerica Emerging. It trades about -0.14 of its potential returns per unit of risk. Transamerica Emerging Markets is currently generating about -0.16 per unit of risk. If you would invest 942.00 in Payden Core Bond on August 29, 2024 and sell it today you would lose (18.00) from holding Payden Core Bond or give up 1.91% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Payden Core Bond vs. Transamerica Emerging Markets
Performance |
| Timeline |
| Payden Core Bond |
| Transamerica Emerging |
Payden Core and Transamerica Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Payden Core and Transamerica Emerging
The main advantage of trading using opposite Payden Core and Transamerica Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Payden Core position performs unexpectedly, Transamerica Emerging 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 Transamerica Emerging will offset losses from the drop in Transamerica Emerging's long position.| Payden Core vs. Blrc Sgy Mnp | Payden Core vs. Vanguard Emerging Markets | Payden Core vs. Federated Short Intermediate Duration | Payden Core vs. Multisector Bond Sma |
| Transamerica Emerging vs. Vanguard Emerging Markets | Transamerica Emerging vs. Vanguard Emerging Markets | Transamerica Emerging vs. HUMANA INC | Transamerica Emerging vs. Aquagold International |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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