Correlation Between Dunham Corporate/govern and Aqr Diversified
Can any of the company-specific risk be diversified away by investing in both Dunham Corporate/govern 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 Dunham Corporate/govern and Aqr Diversified into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dunham Porategovernment Bond and Aqr Diversified Arbitrage, you can compare the effects of market volatilities on Dunham Corporate/govern 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 Dunham Corporate/govern with a short position of Aqr Diversified. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dunham Corporate/govern and Aqr Diversified.
Diversification Opportunities for Dunham Corporate/govern and Aqr Diversified
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Dunham and Aqr is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Dunham Porategovernment Bond 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 Dunham Corporate/govern 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 Dunham Porategovernment Bond 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 Dunham Corporate/govern i.e., Dunham Corporate/govern and Aqr Diversified go up and down completely randomly.
Pair Corralation between Dunham Corporate/govern and Aqr Diversified
Assuming the 90 days horizon Dunham Porategovernment Bond is expected to generate 1.17 times more return on investment than Aqr Diversified. However, Dunham Corporate/govern is 1.17 times more volatile than Aqr Diversified Arbitrage. It trades about 0.09 of its potential returns per unit of risk. Aqr Diversified Arbitrage is currently generating about 0.05 per unit of risk. If you would invest 1,188 in Dunham Porategovernment Bond on September 4, 2024 and sell it today you would earn a total of 77.00 from holding Dunham Porategovernment Bond or generate 6.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dunham Porategovernment Bond vs. Aqr Diversified Arbitrage
Performance |
| Timeline |
| Dunham Porategovernment |
| Aqr Diversified Arbitrage |
Dunham Corporate/govern and Aqr Diversified Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dunham Corporate/govern and Aqr Diversified
The main advantage of trading using opposite Dunham Corporate/govern and Aqr Diversified positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dunham Corporate/govern 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.The idea behind Dunham Porategovernment Bond and Aqr Diversified Arbitrage 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.
| Aqr Diversified vs. Aqr Large Cap | Aqr Diversified vs. Aqr Large Cap | Aqr Diversified vs. Aqr International Defensive | Aqr Diversified vs. Aqr International Defensive |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
Other Complementary Tools
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Equity Valuation Check real value of public entities based on technical and fundamental data |