Correlation Between Payden Absolute and Palmer Square
Can any of the company-specific risk be diversified away by investing in both Payden Absolute and Palmer Square 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 Absolute and Palmer Square into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Payden Absolute Return and Palmer Square Income, you can compare the effects of market volatilities on Payden Absolute and Palmer Square 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 Absolute with a short position of Palmer Square. Check out your portfolio center. Please also check ongoing floating volatility patterns of Payden Absolute and Palmer Square.
Diversification Opportunities for Payden Absolute and Palmer Square
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Payden and Palmer is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Payden Absolute Return and Palmer Square Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Palmer Square Income and Payden Absolute 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 Absolute Return are associated (or correlated) with Palmer Square. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Palmer Square Income has no effect on the direction of Payden Absolute i.e., Payden Absolute and Palmer Square go up and down completely randomly.
Pair Corralation between Payden Absolute and Palmer Square
Assuming the 90 days horizon Payden Absolute is expected to generate 235.0 times less return on investment than Palmer Square. In addition to that, Payden Absolute is 1.94 times more volatile than Palmer Square Income. It trades about 0.0 of its total potential returns per unit of risk. Palmer Square Income is currently generating about 0.38 per unit of volatility. If you would invest 1,011 in Palmer Square Income on December 2, 2024 and sell it today you would earn a total of 5.00 from holding Palmer Square Income or generate 0.49% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Payden Absolute Return vs. Palmer Square Income
Performance |
Timeline |
Payden Absolute Return |
Palmer Square Income |
Payden Absolute and Palmer Square Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Payden Absolute and Palmer Square
The main advantage of trading using opposite Payden Absolute and Palmer Square positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Payden Absolute position performs unexpectedly, Palmer Square 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 Palmer Square will offset losses from the drop in Palmer Square's long position.Payden Absolute vs. Glg Intl Small | Payden Absolute vs. Barings Active Short | Payden Absolute vs. Credit Suisse Multialternative | Payden Absolute vs. Guidemark E Fixed |
Palmer Square vs. Transamerica High Yield | Palmer Square vs. Prudential High Yield | Palmer Square vs. Metropolitan West High | Palmer Square vs. Artisan High Income |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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