Correlation Between Ab Conservative and Payden High

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

By analyzing existing cross correlation between Ab Servative Wealth and Payden High Income, you can compare the effects of market volatilities on Ab Conservative and Payden High 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 Ab Conservative with a short position of Payden High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Conservative and Payden High.

Diversification Opportunities for Ab Conservative and Payden High

0.97

Correlation Coefficient

Ab Conservative  Payden High

Almost no diversification

The 3 months correlation between ABPYX and Payden is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Ab Servative Wealth and Payden High Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Payden High Income and Ab Conservative 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 Ab Servative Wealth are associated (or correlated) with Payden High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Payden High Income has no effect on the direction of Ab Conservative i.e., Ab Conservative and Payden High go up and down completely randomly.

Pair Corralation between Ab Conservative and Payden High

Assuming the 90 days horizon Ab Servative Wealth is expected to generate 3.42 times more return on investment than Payden High. However, Ab Conservative is 3.42 times more volatile than Payden High Income. It trades about 0.3 of its potential returns per unit of risk. Payden High Income is currently generating about 0.41 per unit of risk. If you would invest  1,158  in Ab Servative Wealth on May 1, 2025 and sell it today you would earn a total of  123.00  from holding Ab Servative Wealth or generate 10.62% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

Ab Servative Wealth  vs.  Payden High Income

Ab Servative Wealth

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Ab Servative Wealth are ranked lower than 23 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Ab Conservative may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Payden High Income

Risk-Adjusted Performance

Very Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Payden High Income are ranked lower than 32 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong essential indicators, Payden High is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Ab Conservative and Payden High

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

The idea behind Ab Servative Wealth and Payden High Income 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.