Correlation Between Fisher Investments and Payden Core

Can any of the company-specific risk be diversified away by investing in both Fisher Investments and Payden Core 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 Fisher Investments and Payden Core into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Fisher Large Cap and Payden Core Bond, you can compare the effects of market volatilities on Fisher Investments and Payden Core 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 Fisher Investments with a short position of Payden Core. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fisher Investments and Payden Core.

Diversification Opportunities for Fisher Investments and Payden Core

-0.04

Correlation Coefficient

Fisher Investments  Payden Core

Good diversification

The 3 months correlation between Fisher and Payden is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Fisher Large Cap and Payden Core Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Payden Core Bond and Fisher Investments 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 Fisher Large Cap are associated (or correlated) with Payden Core. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Payden Core Bond has no effect on the direction of Fisher Investments i.e., Fisher Investments and Payden Core go up and down completely randomly.

Pair Corralation between Fisher Investments and Payden Core

Assuming the 90 days horizon Fisher Large Cap is expected to generate 2.52 times more return on investment than Payden Core. However, Fisher Investments is 2.52 times more volatile than Payden Core Bond. It trades about 0.1 of its potential returns per unit of risk. Payden Core Bond is currently generating about 0.03 per unit of risk. If you would invest  1,109  in Fisher Large Cap on October 7, 2024 and sell it today you would earn a total of  690.00  from holding Fisher Large Cap or generate 62.22% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Fisher Large Cap  vs.  Payden Core Bond

Fisher Investments

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Fisher Large Cap are ranked lower than 2 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Fisher Investments is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Payden Core Bond

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Payden Core Bond has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Payden Core is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Fisher Investments and Payden Core

The main advantage of trading using opposite Fisher Investments and Payden Core positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fisher Investments position performs unexpectedly, Payden Core 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 Core will offset losses from the drop in Payden Core's long position.

The idea behind Fisher Large Cap and Payden Core Bond pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.