Correlation Between Payden Absolute and Bny Mellon

Can any of the company-specific risk be diversified away by investing in both Payden Absolute and Bny Mellon 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 Bny Mellon 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 Bny Mellon International, you can compare the effects of market volatilities on Payden Absolute and Bny Mellon 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 Bny Mellon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Payden Absolute and Bny Mellon.

Diversification Opportunities for Payden Absolute and Bny Mellon

-0.77

Correlation Coefficient

Payden Absolute  Bny Mellon

Pay attention - limited upside

The 3 months correlation between Payden and Bny is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Payden Absolute Return and Bny Mellon International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bny Mellon International 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 Bny Mellon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bny Mellon International has no effect on the direction of Payden Absolute i.e., Payden Absolute and Bny Mellon go up and down completely randomly.

Pair Corralation between Payden Absolute and Bny Mellon

Assuming the 90 days horizon Payden Absolute Return is not expected to generate positive returns. However, Payden Absolute Return is 9.28 times less risky than Bny Mellon. It waists most of its returns potential to compensate for thr risk taken. Bny Mellon is generating about -0.32 per unit of risk. If you would invest  947.00  in Payden Absolute Return on October 5, 2024 and sell it today you would earn a total of  0.00  from holding Payden Absolute Return or generate 0.0% return on investment over 90 days.

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

Payden Absolute Return  vs.  Bny Mellon International

Payden Absolute Return

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Payden Absolute Return are ranked lower than 13 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Payden Absolute is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Bny Mellon International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bny Mellon International has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with Payden Absolute and Bny Mellon

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

The idea behind Payden Absolute Return and Bny Mellon International 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.