Correlation Between Transamerica Intermediate and Payden Regal
Can any of the company-specific risk be diversified away by investing in both Transamerica Intermediate and Payden Regal 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 Transamerica Intermediate and Payden Regal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Transamerica Intermediate Muni and The Payden Regal, you can compare the effects of market volatilities on Transamerica Intermediate and Payden Regal 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 Transamerica Intermediate with a short position of Payden Regal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Transamerica Intermediate and Payden Regal.
Diversification Opportunities for Transamerica Intermediate and Payden Regal
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Transamerica and Payden is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Transamerica Intermediate Muni and The Payden Regal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Payden Regal and Transamerica Intermediate 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 Transamerica Intermediate Muni are associated (or correlated) with Payden Regal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Payden Regal has no effect on the direction of Transamerica Intermediate i.e., Transamerica Intermediate and Payden Regal go up and down completely randomly.
Pair Corralation between Transamerica Intermediate and Payden Regal
Assuming the 90 days horizon Transamerica Intermediate is expected to generate 2.91 times less return on investment than Payden Regal. In addition to that, Transamerica Intermediate is 1.24 times more volatile than The Payden Regal. It trades about 0.05 of its total potential returns per unit of risk. The Payden Regal is currently generating about 0.19 per unit of volatility. If you would invest 583.00 in The Payden Regal on November 3, 2024 and sell it today you would earn a total of 51.00 from holding The Payden Regal or generate 8.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Transamerica Intermediate Muni vs. The Payden Regal
Performance |
| Timeline |
| Transamerica Intermediate |
| Payden Regal |
Transamerica Intermediate and Payden Regal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Transamerica Intermediate and Payden Regal
The main advantage of trading using opposite Transamerica Intermediate and Payden Regal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Transamerica Intermediate position performs unexpectedly, Payden Regal 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 Regal will offset losses from the drop in Payden Regal's long position.| Transamerica Intermediate vs. Gmo High Yield | Transamerica Intermediate vs. Lgm Risk Managed | Transamerica Intermediate vs. Calamos High Income | Transamerica Intermediate vs. One Choice Portfolio |
| Payden Regal vs. Dunham High Yield | Payden Regal vs. Federated High Yield | Payden Regal vs. Jpmorgan High Yield | Payden Regal vs. Prudential High Yield |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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