Correlation Between Aqr Risk and Catalyst/smh High
Can any of the company-specific risk be diversified away by investing in both Aqr Risk and Catalyst/smh 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 Aqr Risk and Catalyst/smh High into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aqr Risk Parity and Catalystsmh High Income, you can compare the effects of market volatilities on Aqr Risk and Catalyst/smh 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 Aqr Risk with a short position of Catalyst/smh High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aqr Risk and Catalyst/smh High.
Diversification Opportunities for Aqr Risk and Catalyst/smh High
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Aqr and Catalyst/smh is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Aqr Risk Parity and Catalystsmh High Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catalystsmh High Income and Aqr Risk 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 Aqr Risk Parity are associated (or correlated) with Catalyst/smh High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Catalystsmh High Income has no effect on the direction of Aqr Risk i.e., Aqr Risk and Catalyst/smh High go up and down completely randomly.
Pair Corralation between Aqr Risk and Catalyst/smh High
Assuming the 90 days horizon Aqr Risk Parity is expected to generate 2.05 times more return on investment than Catalyst/smh High. However, Aqr Risk is 2.05 times more volatile than Catalystsmh High Income. It trades about 0.09 of its potential returns per unit of risk. Catalystsmh High Income is currently generating about 0.12 per unit of risk. If you would invest 949.00 in Aqr Risk Parity on October 22, 2024 and sell it today you would earn a total of 127.00 from holding Aqr Risk Parity or generate 13.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aqr Risk Parity vs. Catalystsmh High Income
Performance |
| Timeline |
| Aqr Risk Parity |
| Catalystsmh High Income |
Aqr Risk and Catalyst/smh High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aqr Risk and Catalyst/smh High
The main advantage of trading using opposite Aqr Risk and Catalyst/smh High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aqr Risk position performs unexpectedly, Catalyst/smh 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 Catalyst/smh High will offset losses from the drop in Catalyst/smh High's long position.| Aqr Risk vs. Allianzgi Convertible Income | Aqr Risk vs. Fidelity Sai Convertible | Aqr Risk vs. Rationalpier 88 Convertible | Aqr Risk vs. Gabelli Convertible And |
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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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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