Correlation Between Payden High and Federated High
Can any of the company-specific risk be diversified away by investing in both Payden High and Federated High 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 High and Federated High into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Payden High Income and Federated High Yield, you can compare the effects of market volatilities on Payden High and Federated High 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 High with a short position of Federated High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Payden High and Federated High.
Diversification Opportunities for Payden High and Federated High
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Payden and Federated is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Payden High Income and Federated High Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated High Yield and Payden High 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 High Income are associated (or correlated) with Federated High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federated High Yield has no effect on the direction of Payden High i.e., Payden High and Federated High go up and down completely randomly.
Pair Corralation between Payden High and Federated High
Assuming the 90 days horizon Payden High Income is expected to generate 0.92 times more return on investment than Federated High. However, Payden High Income is 1.08 times less risky than Federated High. It trades about 0.33 of its potential returns per unit of risk. Federated High Yield is currently generating about 0.19 per unit of risk. If you would invest 633.00 in Payden High Income on November 1, 2024 and sell it today you would earn a total of 8.00 from holding Payden High Income or generate 1.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Payden High Income vs. Federated High Yield
Performance |
| Timeline |
| Payden High Income |
| Federated High Yield |
Payden High and Federated High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Payden High and Federated High
The main advantage of trading using opposite Payden High and Federated High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Payden High position performs unexpectedly, Federated High 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 Federated High will offset losses from the drop in Federated High's long position.| Payden High vs. Tax Managed Mid Small | Payden High vs. Sp Smallcap 600 | Payden High vs. Franklin Small Cap | Payden High vs. Needham Small Cap |
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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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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