Correlation Between Payden High and Global Core
Can any of the company-specific risk be diversified away by investing in both Payden High and Global Core 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 Global Core 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 Global E Portfolio, you can compare the effects of market volatilities on Payden High and Global Core 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 Global Core. Check out your portfolio center. Please also check ongoing floating volatility patterns of Payden High and Global Core.
Diversification Opportunities for Payden High and Global Core
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Payden and Global is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Payden High Income and Global E Portfolio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global E Portfolio 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 Global Core. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global E Portfolio has no effect on the direction of Payden High i.e., Payden High and Global Core go up and down completely randomly.
Pair Corralation between Payden High and Global Core
Assuming the 90 days horizon Payden High is expected to generate 6.32 times less return on investment than Global Core. But when comparing it to its historical volatility, Payden High Income is 4.2 times less risky than Global Core. It trades about 0.07 of its potential returns per unit of risk. Global E Portfolio is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 2,102 in Global E Portfolio on November 6, 2024 and sell it today you would earn a total of 41.00 from holding Global E Portfolio or generate 1.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Payden High Income vs. Global E Portfolio
Performance |
| Timeline |
| Payden High Income |
| Global E Portfolio |
Payden High and Global Core Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Payden High and Global Core
The main advantage of trading using opposite Payden High and Global Core positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Payden High position performs unexpectedly, Global Core 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 Global Core will offset losses from the drop in Global Core's long position.| Payden High vs. Dreyfus High Yield | Payden High vs. Blackrock High Yield | Payden High vs. Jpmorgan High Yield | Payden High vs. Federated High Yield |
| Global Core vs. Artisan Select Equity | Global Core vs. Qs Global Equity | Global Core vs. Gmo Global Equity | Global Core vs. Old Westbury Fixed |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data |