Correlation Between Payden Us and Great-west

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Payden Us and Great-west 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 Us and Great-west into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Payden Government Fund and Great West Government Mortgage, you can compare the effects of market volatilities on Payden Us and Great-west 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 Us with a short position of Great-west. Check out your portfolio center. Please also check ongoing floating volatility patterns of Payden Us and Great-west.

Diversification Opportunities for Payden Us and Great-west

PaydenGreat-westDiversified AwayPaydenGreat-westDiversified Away100%
0.71
  Correlation Coefficient

Poor diversification

The 3 months correlation between Payden and Great-west is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Payden Government Fund and Great West Government Mortgage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Great West Government and Payden Us 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 Government Fund are associated (or correlated) with Great-west. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Great West Government has no effect on the direction of Payden Us i.e., Payden Us and Great-west go up and down completely randomly.

Pair Corralation between Payden Us and Great-west

Assuming the 90 days horizon Payden Us is expected to generate 2.78 times less return on investment than Great-west. But when comparing it to its historical volatility, Payden Government Fund is 2.09 times less risky than Great-west. It trades about 0.25 of its potential returns per unit of risk. Great West Government Mortgage is currently generating about 0.33 of returns per unit of risk over similar time horizon. If you would invest  801.00  in Great West Government Mortgage on November 30, 2024 and sell it today you would earn a total of  15.00  from holding Great West Government Mortgage or generate 1.87% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy95.45%
ValuesDaily Returns

Payden Government Fund  vs.  Great West Government Mortgage

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -1.5-1.0-0.50.00.51.01.5
JavaScript chart by amCharts 3.21.15PYUSX MXDQX
       Timeline  
Payden Government 

Risk-Adjusted Performance

Modest

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Payden Government Fund are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Payden Us is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb9.329.349.369.389.49.42
Great West Government 

Risk-Adjusted Performance

Insignificant

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Great West Government Mortgage are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Great-west is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb7.97.9588.058.18.15

Payden Us and Great-west Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-0.37-0.17-0.0757-0.0378-0.0018920.03440.07490.170.370.57 51015
JavaScript chart by amCharts 3.21.15PYUSX MXDQX
       Returns  

Pair Trading with Payden Us and Great-west

The main advantage of trading using opposite Payden Us and Great-west positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Payden Us position performs unexpectedly, Great-west 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 Great-west will offset losses from the drop in Great-west's long position.
The idea behind Payden Government Fund and Great West Government Mortgage pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Global Correlations module to find global opportunities by holding instruments from different markets.

Other Complementary Tools

Risk-Return Analysis
View associations between returns expected from investment and the risk you assume
Sign In To Macroaxis
Sign in to explore Macroaxis' wealth optimization platform and fintech modules
Investing Opportunities
Build portfolios using our predefined set of ideas and optimize them against your investing preferences
Efficient Frontier
Plot and analyze your portfolio and positions against risk-return landscape of the market.
Sectors
List of equity sectors categorizing publicly traded companies based on their primary business activities