Correlation Between Payden Us and Aig Government
Can any of the company-specific risk be diversified away by investing in both Payden Us and Aig Government 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 Aig Government 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 Aig Government Money, you can compare the effects of market volatilities on Payden Us and Aig Government 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 Aig Government. Check out your portfolio center. Please also check ongoing floating volatility patterns of Payden Us and Aig Government.
Diversification Opportunities for Payden Us and Aig Government
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Payden and Aig is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Payden Government Fund and Aig Government Money in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aig Government Money 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 Aig Government. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aig Government Money has no effect on the direction of Payden Us i.e., Payden Us and Aig Government go up and down completely randomly.
Pair Corralation between Payden Us and Aig Government
Assuming the 90 days horizon Payden Government Fund is expected to generate 0.73 times more return on investment than Aig Government. However, Payden Government Fund is 1.37 times less risky than Aig Government. It trades about 0.33 of its potential returns per unit of risk. Aig Government Money is currently generating about 0.17 per unit of risk. If you would invest 937.00 in Payden Government Fund on December 2, 2024 and sell it today you would earn a total of 8.00 from holding Payden Government Fund or generate 0.85% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Payden Government Fund vs. Aig Government Money
Performance |
Timeline |
Payden Government |
Aig Government Money |
Payden Us and Aig Government Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Payden Us and Aig Government
The main advantage of trading using opposite Payden Us and Aig Government positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Payden Us position performs unexpectedly, Aig Government 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 Aig Government will offset losses from the drop in Aig Government's long position.Payden Us vs. Bbh Intermediate Municipal | Payden Us vs. Federated Government Income | Payden Us vs. Vanguard Intermediate Term Government | Payden Us vs. Lord Abbett Intermediate |
Aig Government vs. Franklin Natural Resources | Aig Government vs. Transamerica Mlp Energy | Aig Government vs. Short Oil Gas | Aig Government vs. Franklin Natural Resources |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
Other Complementary Tools
Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk |