Correlation Between Payden Us and Allianzgi Global

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

By analyzing existing cross correlation between Payden Government Fund and Allianzgi Global Natural, you can compare the effects of market volatilities on Payden Us and Allianzgi Global 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 Us with a short position of Allianzgi Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Payden Us and Allianzgi Global.

Diversification Opportunities for Payden Us and Allianzgi Global

-0.46

Correlation Coefficient

Payden Us  Allianzgi Global

Very good diversification

The 3 months correlation between Payden and Allianzgi is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Payden Government Fund and Allianzgi Global Natural in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allianzgi Global Natural and Payden Us 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 Government Fund are associated (or correlated) with Allianzgi Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allianzgi Global Natural has no effect on the direction of Payden Us i.e., Payden Us and Allianzgi Global go up and down completely randomly.

Pair Corralation between Payden Us and Allianzgi Global

Assuming the 90 days horizon Payden Government Fund is expected to generate 0.17 times more return on investment than Allianzgi Global. However, Payden Government Fund is 5.99 times less risky than Allianzgi Global. It trades about 0.18 of its potential returns per unit of risk. Allianzgi Global Natural is currently generating about -0.02 per unit of risk. If you would invest  927.00  in Payden Government Fund on December 30, 2024 and sell it today you would earn a total of  16.00  from holding Payden Government Fund or generate 1.73% return on investment over 90 days.

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

Payden Government Fund  vs.  Allianzgi Global Natural

Payden Government

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Payden Government Fund are ranked lower than 14 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Payden Us is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Allianzgi Global Natural

Risk-Adjusted Performance

Very Weak

Over the last 90 days Allianzgi Global Natural has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward indicators, Allianzgi Global 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 Us and Allianzgi Global

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

The idea behind Payden Government Fund and Allianzgi Global Natural 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.