Correlation Between Ab Select and Payden Emerging
Can any of the company-specific risk be diversified away by investing in both Ab Select 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 Ab Select and Payden Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ab Select Longshort and Payden Emerging Markets, you can compare the effects of market volatilities on Ab Select 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 Ab Select with a short position of Payden Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Select and Payden Emerging.
Diversification Opportunities for Ab Select and Payden Emerging
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between ASCLX and Payden is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Ab Select Longshort 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 Ab Select 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 Ab Select Longshort 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 Ab Select i.e., Ab Select and Payden Emerging go up and down completely randomly.
Pair Corralation between Ab Select and Payden Emerging
Assuming the 90 days horizon Ab Select Longshort is expected to generate 1.34 times more return on investment than Payden Emerging. However, Ab Select is 1.34 times more volatile than Payden Emerging Markets. It trades about 0.35 of its potential returns per unit of risk. Payden Emerging Markets is currently generating about 0.38 per unit of risk. If you would invest 1,247 in Ab Select Longshort on April 16, 2025 and sell it today you would earn a total of 88.00 from holding Ab Select Longshort or generate 7.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ab Select Longshort vs. Payden Emerging Markets
Performance |
| Timeline |
| Ab Select Longshort |
| Payden Emerging Markets |
Ab Select and Payden Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ab Select and Payden Emerging
The main advantage of trading using opposite Ab Select and Payden Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Select 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.| Ab Select vs. Needham Aggressive Growth | Ab Select vs. L Abbett Growth | Ab Select vs. Qs Defensive Growth | Ab Select vs. Smallcap Growth Fund |
| Payden Emerging vs. Redwood Real Estate | Payden Emerging vs. Ivy Advantus Real | Payden Emerging vs. Global Real Estate | Payden Emerging vs. Dunham Real Estate |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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