Correlation Between Wasatch Global and Payden High

Can any of the company-specific risk be diversified away by investing in both Wasatch Global and Payden High 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 Wasatch Global and Payden High into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Wasatch Global Select and Payden High Income, you can compare the effects of market volatilities on Wasatch Global and Payden High 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 Wasatch Global with a short position of Payden High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wasatch Global and Payden High.

Diversification Opportunities for Wasatch Global and Payden High

0.66

Correlation Coefficient

Wasatch Global  Payden High

Poor diversification

The 3 months correlation between Wasatch and Payden is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Wasatch Global Select and Payden High Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Payden High Income and Wasatch Global 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 Wasatch Global Select are associated (or correlated) with Payden High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Payden High Income has no effect on the direction of Wasatch Global i.e., Wasatch Global and Payden High go up and down completely randomly.

Pair Corralation between Wasatch Global and Payden High

Assuming the 90 days horizon Wasatch Global Select is expected to generate 5.01 times more return on investment than Payden High. However, Wasatch Global is 5.01 times more volatile than Payden High Income. It trades about 0.07 of its potential returns per unit of risk. Payden High Income is currently generating about 0.23 per unit of risk. If you would invest  938.00  in Wasatch Global Select on September 12, 2024 and sell it today you would earn a total of  341.00  from holding Wasatch Global Select or generate 36.35% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	52.23%
Values	Daily Returns

Wasatch Global Select  vs.  Payden High Income

Wasatch Global Select

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Wasatch Global Select are ranked lower than 7 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Wasatch Global is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Payden High Income

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Payden High Income are ranked lower than 7 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong essential indicators, Payden High is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Wasatch Global and Payden High

The main advantage of trading using opposite Wasatch Global and Payden High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wasatch Global position performs unexpectedly, Payden High 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 High will offset losses from the drop in Payden High's long position.

The idea behind Wasatch Global Select and Payden High Income 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.

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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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.