Correlation Between Payden Low and Payden Equity
Can any of the company-specific risk be diversified away by investing in both Payden Low and Payden Equity 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 Low and Payden Equity into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Payden Low Duration and Payden Equity Income, you can compare the effects of market volatilities on Payden Low and Payden Equity 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 Low with a short position of Payden Equity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Payden Low and Payden Equity.
Diversification Opportunities for Payden Low and Payden Equity
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Payden and Payden is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Payden Low Duration and Payden Equity Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Payden Equity Income and Payden Low 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 Low Duration are associated (or correlated) with Payden Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Payden Equity Income has no effect on the direction of Payden Low i.e., Payden Low and Payden Equity go up and down completely randomly.
Pair Corralation between Payden Low and Payden Equity
Assuming the 90 days horizon Payden Low Duration is expected to generate 0.12 times more return on investment than Payden Equity. However, Payden Low Duration is 8.69 times less risky than Payden Equity. It trades about 0.16 of its potential returns per unit of risk. Payden Equity Income is currently generating about 0.01 per unit of risk. If you would invest 932.00 in Payden Low Duration on November 3, 2024 and sell it today you would earn a total of 47.00 from holding Payden Low Duration or generate 5.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Payden Low Duration vs. Payden Equity Income
Performance |
| Timeline |
| Payden Low Duration |
| Payden Equity Income |
Payden Low and Payden Equity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Payden Low and Payden Equity
The main advantage of trading using opposite Payden Low and Payden Equity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Payden Low position performs unexpectedly, Payden Equity 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 Equity will offset losses from the drop in Payden Equity's long position.| Payden Low vs. Baird Quality Intermediate | Payden Low vs. Franklin Adjustable Government | Payden Low vs. Gamco Global Telecommunications | Payden Low vs. Lind Capital Partners |
| Payden Equity vs. Janus Henderson Global | Payden Equity vs. Eaton Vance Income | Payden Equity vs. William Blair International | Payden Equity vs. Western Asset E |
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 Stocks Directory module to find actively traded stocks across global markets.
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