Correlation Between Payden E and Old Westbury
Can any of the company-specific risk be diversified away by investing in both Payden E and Old Westbury 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 E and Old Westbury into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Payden E Bond and Old Westbury Large, you can compare the effects of market volatilities on Payden E and Old Westbury 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 E with a short position of Old Westbury. Check out your portfolio center. Please also check ongoing floating volatility patterns of Payden E and Old Westbury.
Diversification Opportunities for Payden E and Old Westbury
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Payden and Old is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Payden E Bond and Old Westbury Large in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Old Westbury Large and Payden E 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 E Bond are associated (or correlated) with Old Westbury. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Old Westbury Large has no effect on the direction of Payden E i.e., Payden E and Old Westbury go up and down completely randomly.
Pair Corralation between Payden E and Old Westbury
Assuming the 90 days horizon Payden E Bond is expected to generate 0.54 times more return on investment than Old Westbury. However, Payden E Bond is 1.84 times less risky than Old Westbury. It trades about 0.18 of its potential returns per unit of risk. Old Westbury Large is currently generating about 0.09 per unit of risk. If you would invest 916.00 in Payden E Bond on September 13, 2024 and sell it today you would earn a total of 9.00 from holding Payden E Bond or generate 0.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Payden E Bond vs. Old Westbury Large
Performance |
| Timeline |
| Payden E Bond |
| Old Westbury Large |
Payden E and Old Westbury Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Payden E and Old Westbury
The main advantage of trading using opposite Payden E and Old Westbury positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Payden E position performs unexpectedly, Old Westbury 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 Old Westbury will offset losses from the drop in Old Westbury's long position.| Payden E vs. Payden Absolute Return | Payden E vs. Payden Absolute Return | Payden E vs. Payden Emerging Markets | Payden E vs. The Payden Regal |
| Old Westbury vs. Prudential Government Income | Old Westbury vs. Franklin Adjustable Government | Old Westbury vs. Payden Government Fund | Old Westbury vs. Short Term Government Fund |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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