Correlation Between Volumetric Fund and Payden Emerging

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

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

Diversification Opportunities for Volumetric Fund and Payden Emerging

-0.68

Correlation Coefficient

Volumetric Fund  Payden Emerging

Excellent diversification

The 3 months correlation between Volumetric and Payden is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Volumetric Fund Volumetric and Payden Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Payden Emerging Markets and Volumetric Fund 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 Volumetric Fund Volumetric are associated (or correlated) with Payden Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Payden Emerging Markets has no effect on the direction of Volumetric Fund i.e., Volumetric Fund and Payden Emerging go up and down completely randomly.

Pair Corralation between Volumetric Fund and Payden Emerging

Assuming the 90 days horizon Volumetric Fund Volumetric is expected to under-perform the Payden Emerging. In addition to that, Volumetric Fund is 2.03 times more volatile than Payden Emerging Markets. It trades about -0.09 of its total potential returns per unit of risk. Payden Emerging Markets is currently generating about 0.15 per unit of volatility. If you would invest  447.00  in Payden Emerging Markets on December 28, 2024 and sell it today you would earn a total of  17.00  from holding Payden Emerging Markets or generate 3.8% return on investment over 90 days.

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

Volumetric Fund Volumetric  vs.  Payden Emerging Markets

Volumetric Fund Volu

Risk-Adjusted Performance

Very Weak

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

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 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong essential indicators, Payden Emerging is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Volumetric Fund and Payden Emerging

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

The idea behind Volumetric Fund Volumetric and Payden Emerging Markets 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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.