Correlation Between Payden Strategic and Payden Emerging
Can any of the company-specific risk be diversified away by investing in both Payden Strategic 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 Strategic 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 Strategic Income and Payden Emerging Markets, you can compare the effects of market volatilities on Payden Strategic 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 Strategic with a short position of Payden Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Payden Strategic and Payden Emerging.
Diversification Opportunities for Payden Strategic and Payden Emerging
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Payden and Payden is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Payden Strategic Income 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 Strategic 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 Strategic Income 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 Strategic i.e., Payden Strategic and Payden Emerging go up and down completely randomly.
Pair Corralation between Payden Strategic and Payden Emerging
Assuming the 90 days horizon Payden Strategic is expected to generate 1.97 times less return on investment than Payden Emerging. But when comparing it to its historical volatility, Payden Strategic Income is 1.46 times less risky than Payden Emerging. It trades about 0.29 of its potential returns per unit of risk. Payden Emerging Markets is currently generating about 0.39 of returns per unit of risk over similar time horizon. If you would invest 1,029 in Payden Emerging Markets on May 31, 2025 and sell it today you would earn a total of 53.00 from holding Payden Emerging Markets or generate 5.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 98.41% |
| Values | Daily Returns |
Payden Strategic Income vs. Payden Emerging Markets
Performance |
| Timeline |
| Payden Strategic Income |
| Payden Emerging Markets |
Payden Strategic and Payden Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Payden Strategic and Payden Emerging
The main advantage of trading using opposite Payden Strategic and Payden Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Payden Strategic 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 Strategic vs. Lord Abbett Small | Payden Strategic vs. Applied Finance Explorer | Payden Strategic vs. Boston Partners Small | Payden Strategic vs. Omni Small Cap Value |
| Payden Emerging vs. Prudential Real Estate | Payden Emerging vs. Simt Real Estate | Payden Emerging vs. Tiaa Cref Real Estate | Payden Emerging vs. Forum 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
Other Complementary Tools
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios |