Correlation Between Payden Emerging and Fundvantage Trust

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

By analyzing existing cross correlation between Payden Emerging Markets and Fundvantage Trust , you can compare the effects of market volatilities on Payden Emerging and Fundvantage Trust 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 Emerging with a short position of Fundvantage Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of Payden Emerging and Fundvantage Trust.

Diversification Opportunities for Payden Emerging and Fundvantage Trust

0.0

Correlation Coefficient

Payden Emerging  Fundvantage Trust

Pay attention - limited upside

The 3 months correlation between Payden and Fundvantage is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Payden Emerging Markets and Fundvantage Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fundvantage Trust and Payden Emerging 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 Emerging Markets are associated (or correlated) with Fundvantage Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fundvantage Trust has no effect on the direction of Payden Emerging i.e., Payden Emerging and Fundvantage Trust go up and down completely randomly.

Pair Corralation between Payden Emerging and Fundvantage Trust

If you would invest  873.00  in Payden Emerging Markets on December 2, 2024 and sell it today you would earn a total of  12.00  from holding Payden Emerging Markets or generate 1.37% return on investment over 90 days.

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

Payden Emerging Markets  vs.  Fundvantage Trust

Payden Emerging Markets

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Payden Emerging Markets are ranked lower than 12 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Payden Emerging is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Fundvantage Trust

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Payden Emerging and Fundvantage Trust

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

The idea behind Payden Emerging Markets and Fundvantage Trust 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.