Correlation Between William Blair and Payden Us

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

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

Diversification Opportunities for William Blair and Payden Us

-0.85

Correlation Coefficient

William Blair  Payden Us

Pay attention - limited upside

The 3 months correlation between William and Payden is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding William Blair Growth and Payden Government Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Payden Government and William Blair 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 William Blair Growth are associated (or correlated) with Payden Us. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Payden Government has no effect on the direction of William Blair i.e., William Blair and Payden Us go up and down completely randomly.

Pair Corralation between William Blair and Payden Us

Assuming the 90 days horizon William Blair Growth is expected to under-perform the Payden Us. In addition to that, William Blair is 8.69 times more volatile than Payden Government Fund. It trades about -0.15 of its total potential returns per unit of risk. Payden Government Fund is currently generating about 0.2 per unit of volatility. If you would invest  927.00  in Payden Government Fund on December 29, 2024 and sell it today you would earn a total of  18.00  from holding Payden Government Fund or generate 1.94% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	98.39%
Values	Daily Returns

William Blair Growth  vs.  Payden Government Fund

William Blair Growth

Risk-Adjusted Performance

Very Weak

Over the last 90 days William Blair Growth 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 April 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

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 15 (%) 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.

Pair Trading with William Blair and Payden Us

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

The idea behind William Blair Growth and Payden Government Fund 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.