Correlation Between Aqr Risk-balanced and Western Asset
Can any of the company-specific risk be diversified away by investing in both Aqr Risk-balanced and Western Asset 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-balanced and Western Asset into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aqr Risk Balanced Modities and Western Asset High, you can compare the effects of market volatilities on Aqr Risk-balanced and Western Asset 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-balanced with a short position of Western Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aqr Risk-balanced and Western Asset.
Diversification Opportunities for Aqr Risk-balanced and Western Asset
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between AQR and Western is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Aqr Risk Balanced Modities and Western Asset High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Asset High and Aqr Risk-balanced 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 Balanced Modities are associated (or correlated) with Western Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Asset High has no effect on the direction of Aqr Risk-balanced i.e., Aqr Risk-balanced and Western Asset go up and down completely randomly.
Pair Corralation between Aqr Risk-balanced and Western Asset
Assuming the 90 days horizon Aqr Risk Balanced Modities is expected to under-perform the Western Asset. In addition to that, Aqr Risk-balanced is 5.01 times more volatile than Western Asset High. It trades about -0.04 of its total potential returns per unit of risk. Western Asset High is currently generating about 0.22 per unit of volatility. If you would invest 700.00 in Western Asset High on August 31, 2024 and sell it today you would earn a total of 6.00 from holding Western Asset High or generate 0.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aqr Risk Balanced Modities vs. Western Asset High
Performance |
| Timeline |
| Aqr Risk Balanced |
| Western Asset High |
Aqr Risk-balanced and Western Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aqr Risk-balanced and Western Asset
The main advantage of trading using opposite Aqr Risk-balanced and Western Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aqr Risk-balanced position performs unexpectedly, Western Asset 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 Western Asset will offset losses from the drop in Western Asset's long position.| Aqr Risk-balanced vs. Commodityrealreturn Strategy Fund | Aqr Risk-balanced vs. Commodityrealreturn Strategy Fund | Aqr Risk-balanced vs. HUMANA INC | Aqr Risk-balanced vs. Aquagold International |
| Western Asset vs. Vanguard High Yield Corporate | Western Asset vs. Vanguard High Yield Porate | Western Asset vs. Blackrock Hi Yld | Western Asset vs. Blackrock High Yield |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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