Correlation Between Catalyst Hedged and Aqr Diversified
Can any of the company-specific risk be diversified away by investing in both Catalyst Hedged and Aqr Diversified 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 Catalyst Hedged and Aqr Diversified into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Catalyst Hedged Modity and Aqr Diversified Arbitrage, you can compare the effects of market volatilities on Catalyst Hedged and Aqr Diversified 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 Catalyst Hedged with a short position of Aqr Diversified. Check out your portfolio center. Please also check ongoing floating volatility patterns of Catalyst Hedged and Aqr Diversified.
Diversification Opportunities for Catalyst Hedged and Aqr Diversified
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Catalyst and Aqr is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Catalyst Hedged Modity and Aqr Diversified Arbitrage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aqr Diversified Arbitrage and Catalyst Hedged 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 Catalyst Hedged Modity are associated (or correlated) with Aqr Diversified. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aqr Diversified Arbitrage has no effect on the direction of Catalyst Hedged i.e., Catalyst Hedged and Aqr Diversified go up and down completely randomly.
Pair Corralation between Catalyst Hedged and Aqr Diversified
Assuming the 90 days horizon Catalyst Hedged Modity is expected to under-perform the Aqr Diversified. In addition to that, Catalyst Hedged is 3.32 times more volatile than Aqr Diversified Arbitrage. It trades about -0.01 of its total potential returns per unit of risk. Aqr Diversified Arbitrage is currently generating about 0.06 per unit of volatility. If you would invest 1,137 in Aqr Diversified Arbitrage on September 3, 2024 and sell it today you would earn a total of 83.00 from holding Aqr Diversified Arbitrage or generate 7.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Catalyst Hedged Modity vs. Aqr Diversified Arbitrage
Performance |
| Timeline |
| Catalyst Hedged Modity |
| Aqr Diversified Arbitrage |
Catalyst Hedged and Aqr Diversified Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Catalyst Hedged and Aqr Diversified
The main advantage of trading using opposite Catalyst Hedged and Aqr Diversified positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Catalyst Hedged position performs unexpectedly, Aqr Diversified 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 Aqr Diversified will offset losses from the drop in Aqr Diversified's long position.| Catalyst Hedged vs. Commonwealth Global Fund | Catalyst Hedged vs. Doubleline Global Bond | Catalyst Hedged vs. Ab Global Real | Catalyst Hedged vs. Alliancebernstein Global High |
| Aqr Diversified vs. Eip Growth And | Aqr Diversified vs. Mid Cap Growth | Aqr Diversified vs. Smallcap Growth Fund | Aqr Diversified vs. Qs Growth Fund |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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