Correlation Between Spectrum Fund and Payden High

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

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

Diversification Opportunities for Spectrum Fund and Payden High

0.98

Correlation Coefficient

Spectrum Fund  Payden High

Almost no diversification

The 3 months correlation between Spectrum and Payden is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Spectrum Fund Institutional 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 Spectrum 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 Spectrum Fund Institutional 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 Spectrum Fund i.e., Spectrum Fund and Payden High go up and down completely randomly.

Pair Corralation between Spectrum Fund and Payden High

Assuming the 90 days horizon Spectrum Fund is expected to generate 22.93 times less return on investment than Payden High. But when comparing it to its historical volatility, Spectrum Fund Institutional is 37.08 times less risky than Payden High. It trades about 0.08 of its potential returns per unit of risk. Payden High Income is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  132.00  in Payden High Income on July 1, 2025 and sell it today you would earn a total of  1,158  from holding Payden High Income or generate 877.27% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	87.21%
Values	Daily Returns

Spectrum Fund Institutional  vs.  Payden High Income

Spectrum Fund Instit

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Spectrum Fund Institutional are ranked lower than 17 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward indicators, Spectrum Fund may actually be approaching a critical reversion point that can send shares even higher in October 2025.

Payden High Income

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Payden High Income are ranked lower than 27 (%) 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 Spectrum Fund and Payden High

The main advantage of trading using opposite Spectrum Fund and Payden High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Spectrum Fund 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 Spectrum Fund Institutional 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.