Correlation Between Payden Emerging and Simt Global
Can any of the company-specific risk be diversified away by investing in both Payden Emerging and Simt Global 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 Emerging and Simt Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Payden Emerging Markets and Simt Global Managed, you can compare the effects of market volatilities on Payden Emerging and Simt Global 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 Emerging with a short position of Simt Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Payden Emerging and Simt Global.
Diversification Opportunities for Payden Emerging and Simt Global
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Payden and SIMT is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Payden Emerging Markets and Simt Global Managed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Simt Global Managed and Payden Emerging 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 Emerging Markets are associated (or correlated) with Simt Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Simt Global Managed has no effect on the direction of Payden Emerging i.e., Payden Emerging and Simt Global go up and down completely randomly.
Pair Corralation between Payden Emerging and Simt Global
Assuming the 90 days horizon Payden Emerging is expected to generate 1.24 times less return on investment than Simt Global. But when comparing it to its historical volatility, Payden Emerging Markets is 2.93 times less risky than Simt Global. It trades about 0.4 of its potential returns per unit of risk. Simt Global Managed is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 1,109 in Simt Global Managed on June 6, 2025 and sell it today you would earn a total of 14.00 from holding Simt Global Managed or generate 1.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Payden Emerging Markets vs. Simt Global Managed
Performance |
| Timeline |
| Payden Emerging Markets |
| Simt Global Managed |
Payden Emerging and Simt Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Payden Emerging and Simt Global
The main advantage of trading using opposite Payden Emerging and Simt Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Payden Emerging position performs unexpectedly, Simt Global 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 Simt Global will offset losses from the drop in Simt Global's long position.| Payden Emerging vs. Qs Global Equity | Payden Emerging vs. Morgan Stanley Global | Payden Emerging vs. Scharf Global Opportunity | Payden Emerging vs. Dodge Global Stock |
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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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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