Correlation Between Payden Strategic and Payden Core
Can any of the company-specific risk be diversified away by investing in both Payden Strategic and Payden 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 Strategic and Payden Core into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Payden Strategic Income and Payden E Bond, you can compare the effects of market volatilities on Payden Strategic and Payden 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 Strategic with a short position of Payden Core. Check out your portfolio center. Please also check ongoing floating volatility patterns of Payden Strategic and Payden Core.
Diversification Opportunities for Payden Strategic and Payden Core
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Payden and Payden is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Payden Strategic Income and Payden E Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Payden E Bond and Payden Strategic 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 Strategic Income are associated (or correlated) with Payden Core. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Payden E Bond has no effect on the direction of Payden Strategic i.e., Payden Strategic and Payden Core go up and down completely randomly.
Pair Corralation between Payden Strategic and Payden Core
Assuming the 90 days horizon Payden Strategic Income is expected to generate 0.59 times more return on investment than Payden Core. However, Payden Strategic Income is 1.7 times less risky than Payden Core. It trades about 0.18 of its potential returns per unit of risk. Payden E Bond is currently generating about 0.09 per unit of risk. If you would invest 953.00 in Payden Strategic Income on October 23, 2024 and sell it today you would earn a total of 5.00 from holding Payden Strategic Income or generate 0.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Payden Strategic Income vs. Payden E Bond
Performance |
| Timeline |
| Payden Strategic Income |
| Payden E Bond |
Payden Strategic and Payden Core Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Payden Strategic and Payden Core
The main advantage of trading using opposite Payden Strategic and Payden Core positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Payden Strategic position performs unexpectedly, Payden 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 Payden Core will offset losses from the drop in Payden Core's long position.| Payden Strategic vs. American Funds Retirement | Payden Strategic vs. Lifestyle Ii Moderate | Payden Strategic vs. Voya Target Retirement | Payden Strategic vs. Target Retirement 2040 |
| Payden Core vs. Western Assets Emerging | Payden Core vs. Franklin Emerging Market | Payden Core vs. Artisan Developing World | Payden Core vs. Angel Oak Multi Strategy |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
Other Complementary Tools
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance |