Correlation Between Payden Government and Mid-cap Profund
Can any of the company-specific risk be diversified away by investing in both Payden Government and Mid-cap Profund 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 Government and Mid-cap Profund into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Payden Government Fund and Mid Cap Profund Mid Cap, you can compare the effects of market volatilities on Payden Government and Mid-cap Profund 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 Government with a short position of Mid-cap Profund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Payden Government and Mid-cap Profund.
Diversification Opportunities for Payden Government and Mid-cap Profund
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Payden and Mid-cap is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Payden Government Fund and Mid Cap Profund Mid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mid Cap Profund and Payden Government 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 Government Fund are associated (or correlated) with Mid-cap Profund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mid Cap Profund has no effect on the direction of Payden Government i.e., Payden Government and Mid-cap Profund go up and down completely randomly.
Pair Corralation between Payden Government and Mid-cap Profund
Assuming the 90 days horizon Payden Government is expected to generate 2.52 times less return on investment than Mid-cap Profund. But when comparing it to its historical volatility, Payden Government Fund is 6.95 times less risky than Mid-cap Profund. It trades about 0.13 of its potential returns per unit of risk. Mid Cap Profund Mid Cap is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 8,020 in Mid Cap Profund Mid Cap on June 12, 2025 and sell it today you would earn a total of 2,019 from holding Mid Cap Profund Mid Cap or generate 25.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Payden Government Fund vs. Mid Cap Profund Mid Cap
Performance |
| Timeline |
| Payden Government |
| Mid Cap Profund |
Payden Government and Mid-cap Profund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Payden Government and Mid-cap Profund
The main advantage of trading using opposite Payden Government and Mid-cap Profund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Payden Government position performs unexpectedly, Mid-cap Profund 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 Mid-cap Profund will offset losses from the drop in Mid-cap Profund's long position.| Payden Government vs. Payden E Bond | Payden Government vs. Payden Emerging Markets | Payden Government vs. Payden California Municipal | Payden Government vs. Payden E Bond |
| Mid-cap Profund vs. Sit Government Securities | Mid-cap Profund vs. Us Government Securities | Mid-cap Profund vs. Intermediate Government Bond | Mid-cap Profund vs. Wells Fargo Government |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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