Correlation Between Payden Absolute and Payden Emerging
Can any of the company-specific risk be diversified away by investing in both Payden Absolute and Payden Emerging 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 Absolute and Payden Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Payden Absolute Return and Payden Emerging Markets, you can compare the effects of market volatilities on Payden Absolute and Payden Emerging 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 Absolute with a short position of Payden Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Payden Absolute and Payden Emerging.
Diversification Opportunities for Payden Absolute and Payden Emerging
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Payden and Payden is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Payden Absolute Return and Payden Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Payden Emerging Markets and Payden Absolute 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 Absolute Return are associated (or correlated) with Payden Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Payden Emerging Markets has no effect on the direction of Payden Absolute i.e., Payden Absolute and Payden Emerging go up and down completely randomly.
Pair Corralation between Payden Absolute and Payden Emerging
Assuming the 90 days horizon Payden Absolute is expected to generate 1.01 times less return on investment than Payden Emerging. But when comparing it to its historical volatility, Payden Absolute Return is 1.77 times less risky than Payden Emerging. It trades about 0.41 of its potential returns per unit of risk. Payden Emerging Markets is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 871.00 in Payden Emerging Markets on September 12, 2024 and sell it today you would earn a total of 15.00 from holding Payden Emerging Markets or generate 1.72% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Payden Absolute Return vs. Payden Emerging Markets
Performance |
Timeline |
Payden Absolute Return |
Payden Emerging Markets |
Payden Absolute and Payden Emerging Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Payden Absolute and Payden Emerging
The main advantage of trading using opposite Payden Absolute and Payden Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Payden Absolute position performs unexpectedly, Payden Emerging 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 Emerging will offset losses from the drop in Payden Emerging's long position.Payden Absolute vs. Europac Gold Fund | Payden Absolute vs. Precious Metals And | Payden Absolute vs. Gold And Precious | Payden Absolute vs. Great West Goldman Sachs |
Payden Emerging vs. Ab Select Equity | Payden Emerging vs. Scharf Fund Retail | Payden Emerging vs. Ab Fixed Income Shares | Payden Emerging vs. Artisan Select Equity |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
Other Complementary Tools
Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins |