Correlation Between Payden Global and SPACE
Can any of the company-specific risk be diversified away by investing in both Payden Global and SPACE 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 Global and SPACE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Payden Global Low and SPACE, you can compare the effects of market volatilities on Payden Global and SPACE 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 Global with a short position of SPACE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Payden Global and SPACE.
Diversification Opportunities for Payden Global and SPACE
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Payden and SPACE is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Payden Global Low and SPACE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPACE and Payden Global 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 Global Low are associated (or correlated) with SPACE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPACE has no effect on the direction of Payden Global i.e., Payden Global and SPACE go up and down completely randomly.
Pair Corralation between Payden Global and SPACE
Assuming the 90 days horizon Payden Global is expected to generate 1593.02 times less return on investment than SPACE. But when comparing it to its historical volatility, Payden Global Low is 1321.15 times less risky than SPACE. It trades about 0.15 of its potential returns per unit of risk. SPACE is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 0.00 in SPACE on September 4, 2024 and sell it today you would earn a total of 59.00 from holding SPACE or generate 9.223372036854776E16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 61.94% |
| Values | Daily Returns |
Payden Global Low vs. SPACE
Performance |
| Timeline |
| Payden Global Low |
| SPACE |
Payden Global and SPACE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Payden Global and SPACE
The main advantage of trading using opposite Payden Global and SPACE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Payden Global position performs unexpectedly, SPACE 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 SPACE will offset losses from the drop in SPACE's long position.| 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 Transaction History module to view history of all your transactions and understand their impact on performance.
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