Correlation Between Payden Us and Long Term
Can any of the company-specific risk be diversified away by investing in both Payden Us and Long Term 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 Us and Long Term 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 Long Term Government Fund, you can compare the effects of market volatilities on Payden Us and Long Term 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 Us with a short position of Long Term. Check out your portfolio center. Please also check ongoing floating volatility patterns of Payden Us and Long Term.
Diversification Opportunities for Payden Us and Long Term
Very weak diversification
The 3 months correlation between Payden and Long is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Payden Government Fund and Long Term Government Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Long Term Government and Payden Us 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 Long Term. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Long Term Government has no effect on the direction of Payden Us i.e., Payden Us and Long Term go up and down completely randomly.
Pair Corralation between Payden Us and Long Term
Assuming the 90 days horizon Payden Government Fund is expected to generate 0.24 times more return on investment than Long Term. However, Payden Government Fund is 4.14 times less risky than Long Term. It trades about 0.09 of its potential returns per unit of risk. Long Term Government Fund is currently generating about -0.02 per unit of risk. If you would invest 948.00 in Payden Government Fund on September 7, 2025 and sell it today you would earn a total of 6.00 from holding Payden Government Fund or generate 0.63% 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. Long Term Government Fund
Performance |
| Timeline |
| Payden Government |
| Long Term Government |
Payden Us and Long Term Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Payden Us and Long Term
The main advantage of trading using opposite Payden Us and Long Term positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Payden Us position performs unexpectedly, Long Term 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 Long Term will offset losses from the drop in Long Term's long position.| Payden Us vs. California High Yield Municipal | Payden Us vs. Janus High Yield Fund | Payden Us vs. Jpmorgan High Yield | Payden Us vs. Columbia High Yield |
| Long Term vs. Pimco Rae Worldwide | Long Term vs. Pimco Rae Worldwide | Long Term vs. Pimco Rae Worldwide | Long Term vs. Pimco Rae Worldwide |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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