Correlation Between Payden Floating and Payden Us
Can any of the company-specific risk be diversified away by investing in both Payden Floating and Payden Us 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 Payden Us 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 Payden Government Fund, you can compare the effects of market volatilities on Payden Floating and Payden Us 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 Payden Us. Check out your portfolio center. Please also check ongoing floating volatility patterns of Payden Floating and Payden Us.
Diversification Opportunities for Payden Floating and Payden Us
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Payden and Payden is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Payden Floating Rate and Payden Government Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Payden Government 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 Payden Us. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Payden Government has no effect on the direction of Payden Floating i.e., Payden Floating and Payden Us go up and down completely randomly.
Pair Corralation between Payden Floating and Payden Us
Assuming the 90 days horizon Payden Floating Rate is expected to generate 0.39 times more return on investment than Payden Us. However, Payden Floating Rate is 2.53 times less risky than Payden Us. It trades about 0.66 of its potential returns per unit of risk. Payden Government Fund is currently generating about -0.22 per unit of risk. If you would invest 965.00 in Payden Floating Rate on August 25, 2024 and sell it today you would earn a total of 17.00 from holding Payden Floating Rate or generate 1.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Payden Floating Rate vs. Payden Government Fund
Performance |
| Timeline |
| Payden Floating Rate |
| Payden Government |
Payden Floating and Payden Us Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Payden Floating and Payden Us
The main advantage of trading using opposite Payden Floating and Payden Us positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Payden Floating position performs unexpectedly, Payden Us 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 Us will offset losses from the drop in Payden Us' long position.| Payden Floating vs. Shelton Emerging Markets | Payden Floating vs. Doubleline Emerging Markets | Payden Floating vs. Pace International Emerging | Payden Floating vs. Aqr Equity Market |
| Payden Us vs. Sp Midcap Index | Payden Us vs. Siit Emerging Markets | Payden Us vs. Ab All Market | Payden Us vs. Aqr Equity Market |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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