Correlation Between NYSE Composite and Payden Strategic
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Payden Strategic 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 NYSE Composite and Payden Strategic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Payden Strategic Income, you can compare the effects of market volatilities on NYSE Composite and Payden Strategic 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 NYSE Composite with a short position of Payden Strategic. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Payden Strategic.
Diversification Opportunities for NYSE Composite and Payden Strategic
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between NYSE and Payden is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Payden Strategic Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Payden Strategic Income and NYSE Composite 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 NYSE Composite are associated (or correlated) with Payden Strategic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Payden Strategic Income has no effect on the direction of NYSE Composite i.e., NYSE Composite and Payden Strategic go up and down completely randomly.
Pair Corralation between NYSE Composite and Payden Strategic
Assuming the 90 days trading horizon NYSE Composite is expected to generate 3.33 times more return on investment than Payden Strategic. However, NYSE Composite is 3.33 times more volatile than Payden Strategic Income. It trades about 0.17 of its potential returns per unit of risk. Payden Strategic Income is currently generating about 0.06 per unit of risk. If you would invest 1,886,663 in NYSE Composite on September 11, 2024 and sell it today you would earn a total of 113,963 from holding NYSE Composite or generate 6.04% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
NYSE Composite vs. Payden Strategic Income
Performance |
Timeline |
NYSE Composite and Payden Strategic Volatility Contrast
Predicted Return Density |
Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Payden Strategic Income
Pair trading matchups for Payden Strategic
Pair Trading with NYSE Composite and Payden Strategic
The main advantage of trading using opposite NYSE Composite and Payden Strategic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Payden Strategic 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 Strategic will offset losses from the drop in Payden Strategic's long position.NYSE Composite vs. Vera Bradley | NYSE Composite vs. American Airlines Group | NYSE Composite vs. Delta Air Lines | NYSE Composite vs. Nike Inc |
Payden Strategic vs. Morningstar Municipal Bond | Payden Strategic vs. Ab Impact Municipal | Payden Strategic vs. T Rowe Price | Payden Strategic vs. Gamco Global Telecommunications |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
Other Complementary Tools
Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
Equity Valuation Check real value of public entities based on technical and fundamental data | |
Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
FinTech Suite Use AI to screen and filter profitable investment opportunities |