Correlation Between Gold And and Payden Absolute

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

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

Diversification Opportunities for Gold And and Payden Absolute

-0.76

Correlation Coefficient

Gold And  Payden Absolute

Pay attention - limited upside

The 3 months correlation between Gold and Payden is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Gold And Precious and Payden Absolute Return in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Payden Absolute Return and Gold And 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 Gold And Precious are associated (or correlated) with Payden Absolute. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Payden Absolute Return has no effect on the direction of Gold And i.e., Gold And and Payden Absolute go up and down completely randomly.

Pair Corralation between Gold And and Payden Absolute

Assuming the 90 days horizon Gold And Precious is expected to generate 22.75 times more return on investment than Payden Absolute. However, Gold And is 22.75 times more volatile than Payden Absolute Return. It trades about 0.02 of its potential returns per unit of risk. Payden Absolute Return is currently generating about 0.27 per unit of risk. If you would invest  1,192  in Gold And Precious on October 21, 2024 and sell it today you would earn a total of  34.00  from holding Gold And Precious or generate 2.85% return on investment over 90 days.

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

Gold And Precious  vs.  Payden Absolute Return

Gold And Precious

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Gold And Precious 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.

Payden Absolute Return

Risk-Adjusted Performance

21 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Payden Absolute Return are ranked lower than 21 (%) 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.

Pair Trading with Gold And and Payden Absolute

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

The idea behind Gold And Precious and Payden Absolute Return 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.