Correlation Between Payden Government and Guggenheim Managed
Can any of the company-specific risk be diversified away by investing in both Payden Government and Guggenheim Managed 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 Government and Guggenheim Managed 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 Guggenheim Managed Futures, you can compare the effects of market volatilities on Payden Government and Guggenheim Managed 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 Government with a short position of Guggenheim Managed. Check out your portfolio center. Please also check ongoing floating volatility patterns of Payden Government and Guggenheim Managed.
Diversification Opportunities for Payden Government and Guggenheim Managed
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Payden and Guggenheim is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Payden Government Fund and Guggenheim Managed Futures in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guggenheim Managed and Payden Government 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 Guggenheim Managed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guggenheim Managed has no effect on the direction of Payden Government i.e., Payden Government and Guggenheim Managed go up and down completely randomly.
Pair Corralation between Payden Government and Guggenheim Managed
Assuming the 90 days horizon Payden Government Fund is expected to generate 0.21 times more return on investment than Guggenheim Managed. However, Payden Government Fund is 4.8 times less risky than Guggenheim Managed. It trades about 0.08 of its potential returns per unit of risk. Guggenheim Managed Futures is currently generating about -0.05 per unit of risk. If you would invest 935.00 in Payden Government Fund on November 7, 2024 and sell it today you would earn a total of 2.00 from holding Payden Government Fund or generate 0.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Payden Government Fund vs. Guggenheim Managed Futures
Performance |
| Timeline |
| Payden Government |
| Guggenheim Managed |
Payden Government and Guggenheim Managed Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Payden Government and Guggenheim Managed
The main advantage of trading using opposite Payden Government and Guggenheim Managed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Payden Government position performs unexpectedly, Guggenheim Managed 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 Guggenheim Managed will offset losses from the drop in Guggenheim Managed's long position.| Payden Government vs. Arrow Managed Futures | Payden Government vs. Tiaa Cref Inflation Linked Bond | Payden Government vs. Credit Suisse Multialternative | Payden Government vs. Cref Inflation Linked Bond |
| Guggenheim Managed vs. Aqr Diversified Arbitrage | Guggenheim Managed vs. Diversified Income Fund | Guggenheim Managed vs. Lord Abbett Diversified | Guggenheim Managed vs. Guggenheim Diversified Income |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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