Correlation Between Payden Floating and Rbc Bluebay

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

By analyzing existing cross correlation between Payden Floating Rate and Rbc Bluebay Absolute, you can compare the effects of market volatilities on Payden Floating and Rbc Bluebay 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 Floating with a short position of Rbc Bluebay. Check out your portfolio center. Please also check ongoing floating volatility patterns of Payden Floating and Rbc Bluebay.

Diversification Opportunities for Payden Floating and Rbc Bluebay

-0.53

Correlation Coefficient

Payden Floating  Rbc Bluebay

Excellent diversification

The 3 months correlation between Payden and Rbc is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Payden Floating Rate and Rbc Bluebay Absolute in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rbc Bluebay Absolute and Payden Floating 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 Floating Rate are associated (or correlated) with Rbc Bluebay. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rbc Bluebay Absolute has no effect on the direction of Payden Floating i.e., Payden Floating and Rbc Bluebay go up and down completely randomly.

Pair Corralation between Payden Floating and Rbc Bluebay

Assuming the 90 days horizon Payden Floating Rate is expected to generate 0.08 times more return on investment than Rbc Bluebay. However, Payden Floating Rate is 12.39 times less risky than Rbc Bluebay. It trades about -0.07 of its potential returns per unit of risk. Rbc Bluebay Absolute is currently generating about -0.12 per unit of risk. If you would invest  979.00  in Payden Floating Rate on October 6, 2024 and sell it today you would lose (2.00) from holding Payden Floating Rate or give up 0.2% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	95.24%
Values	Daily Returns

Payden Floating Rate  vs.  Rbc Bluebay Absolute

Payden Floating Rate

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Payden Floating Rate are ranked lower than 8 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong essential indicators, Payden Floating is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Rbc Bluebay Absolute

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Rbc Bluebay Absolute has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's basic indicators remain fairly strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Pair Trading with Payden Floating and Rbc Bluebay

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

The idea behind Payden Floating Rate and Rbc Bluebay Absolute 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 Commodity Directory module to find actively traded commodities issued by global exchanges.