Correlation Between Payden Floating and Shelton Emerging
Can any of the company-specific risk be diversified away by investing in both Payden Floating and Shelton 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 Floating and Shelton Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Payden Floating Rate and Shelton Emerging Markets, you can compare the effects of market volatilities on Payden Floating and Shelton 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 Floating with a short position of Shelton Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Payden Floating and Shelton Emerging.
Diversification Opportunities for Payden Floating and Shelton Emerging
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Payden and Shelton is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Payden Floating Rate and Shelton Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shelton Emerging Markets and Payden Floating 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 Floating Rate are associated (or correlated) with Shelton Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shelton Emerging Markets has no effect on the direction of Payden Floating i.e., Payden Floating and Shelton Emerging go up and down completely randomly.
Pair Corralation between Payden Floating and Shelton Emerging
Assuming the 90 days horizon Payden Floating Rate is expected to generate 0.07 times more return on investment than Shelton Emerging. However, Payden Floating Rate is 14.13 times less risky than Shelton Emerging. It trades about 0.63 of its potential returns per unit of risk. Shelton Emerging Markets is currently generating about -0.2 per unit of risk. If you would invest 975.00 in Payden Floating Rate on August 29, 2024 and sell it today you would earn a total of 8.00 from holding Payden Floating Rate or generate 0.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Payden Floating Rate vs. Shelton Emerging Markets
Performance |
| Timeline |
| Payden Floating Rate |
| Shelton Emerging Markets |
Payden Floating and Shelton Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Payden Floating and Shelton Emerging
The main advantage of trading using opposite Payden Floating and Shelton Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Payden Floating position performs unexpectedly, Shelton 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 Shelton Emerging will offset losses from the drop in Shelton Emerging's long position.| Payden Floating vs. Sterling Capital Stratton | Payden Floating vs. Teachers Insurance And | Payden Floating vs. American Century Global | Payden Floating vs. T Rowe Price |
| Shelton Emerging vs. Vanguard Emerging Markets | Shelton Emerging vs. Vanguard Emerging Markets | Shelton Emerging vs. HUMANA INC | Shelton 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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