Correlation Between Payden Absolute and Payden E
Can any of the company-specific risk be diversified away by investing in both Payden Absolute and Payden E 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 E 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 E Bond, you can compare the effects of market volatilities on Payden Absolute and Payden E 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 E. Check out your portfolio center. Please also check ongoing floating volatility patterns of Payden Absolute and Payden E.
Diversification Opportunities for Payden Absolute and Payden E
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Payden and Payden is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Payden Absolute Return and Payden E Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Payden E Bond 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 E. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Payden E Bond has no effect on the direction of Payden Absolute i.e., Payden Absolute and Payden E go up and down completely randomly.
Pair Corralation between Payden Absolute and Payden E
Assuming the 90 days horizon Payden Absolute Return is expected to under-perform the Payden E. But the mutual fund apears to be less risky and, when comparing its historical volatility, Payden Absolute Return is 1.03 times less risky than Payden E. The mutual fund trades about -0.01 of its potential returns per unit of risk. The Payden E Bond is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 929.00 in Payden E Bond on October 7, 2025 and sell it today you would earn a total of 2.00 from holding Payden E Bond or generate 0.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Payden Absolute Return vs. Payden E Bond
Performance |
| Timeline |
| Payden Absolute Return |
| Payden E Bond |
Payden Absolute and Payden E Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Payden Absolute and Payden E
The main advantage of trading using opposite Payden Absolute and Payden E positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Payden Absolute position performs unexpectedly, Payden E 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 E will offset losses from the drop in Payden E's long position.| Payden Absolute vs. Nuveen Large Cap | Payden Absolute vs. Gmo Equity Allocation | Payden Absolute vs. Aggressive Balanced Allocation | Payden Absolute vs. Clough Global Allocation |
| Payden E vs. Gmo Equity Allocation | Payden E vs. Aggressive Balanced Allocation | Payden E vs. Dreyfus Large Cap | Payden E vs. Morningstar Unconstrained Allocation |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
Other Complementary Tools
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes |