Correlation Between Payden Government and Mainstay Government
Can any of the company-specific risk be diversified away by investing in both Payden Government and Mainstay 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 Government and Mainstay 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 Mainstay Government Fund, you can compare the effects of market volatilities on Payden Government and Mainstay 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 Government with a short position of Mainstay Government. Check out your portfolio center. Please also check ongoing floating volatility patterns of Payden Government and Mainstay Government.
Diversification Opportunities for Payden Government and Mainstay Government
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Payden and Mainstay is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Payden Government Fund and Mainstay Government Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainstay Government and Payden Government 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 Mainstay Government. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mainstay Government has no effect on the direction of Payden Government i.e., Payden Government and Mainstay Government go up and down completely randomly.
Pair Corralation between Payden Government and Mainstay Government
Assuming the 90 days horizon Payden Government Fund is expected to generate 0.48 times more return on investment than Mainstay Government. However, Payden Government Fund is 2.07 times less risky than Mainstay Government. It trades about -0.03 of its potential returns per unit of risk. Mainstay Government Fund is currently generating about -0.05 per unit of risk. If you would invest 927.00 in Payden Government Fund on January 20, 2024 and sell it today you would lose (2.00) from holding Payden Government Fund or give up 0.22% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Payden Government Fund vs. Mainstay Government Fund
Performance |
Timeline |
Payden Government |
Mainstay Government |
Payden Government and Mainstay Government Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Payden Government and Mainstay Government
The main advantage of trading using opposite Payden Government and Mainstay Government positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Payden Government position performs unexpectedly, Mainstay 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 Mainstay Government will offset losses from the drop in Mainstay Government's long position.Payden Government vs. Payden Porate Bond | Payden Government vs. Payden Absolute Return | Payden Government vs. Payden Absolute Return | Payden Government vs. Payden Emerging Markets |
Mainstay Government vs. Mainstay High Yield | Mainstay Government vs. Mainstay Tax Free | Mainstay Government vs. Mainstay Income Builder | Mainstay Government vs. Mainstay Large Cap |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
Other Complementary Tools
Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets |