Correlation Between Dunham Porategovernment and Aqr Large
Can any of the company-specific risk be diversified away by investing in both Dunham Porategovernment and Aqr Large 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 Porategovernment and Aqr Large 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 Large Cap, you can compare the effects of market volatilities on Dunham Porategovernment and Aqr Large 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 Porategovernment with a short position of Aqr Large. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dunham Porategovernment and Aqr Large.
Diversification Opportunities for Dunham Porategovernment and Aqr Large
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Dunham and Aqr is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Dunham Porategovernment Bond and Aqr Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aqr Large Cap and Dunham Porategovernment 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 Large. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aqr Large Cap has no effect on the direction of Dunham Porategovernment i.e., Dunham Porategovernment and Aqr Large go up and down completely randomly.
Pair Corralation between Dunham Porategovernment and Aqr Large
Assuming the 90 days horizon Dunham Porategovernment Bond is expected to generate 0.29 times more return on investment than Aqr Large. However, Dunham Porategovernment Bond is 3.43 times less risky than Aqr Large. It trades about 0.17 of its potential returns per unit of risk. Aqr Large Cap is currently generating about 0.02 per unit of risk. If you would invest 1,252 in Dunham Porategovernment Bond on September 13, 2024 and sell it today you would earn a total of 10.00 from holding Dunham Porategovernment Bond or generate 0.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dunham Porategovernment Bond vs. Aqr Large Cap
Performance |
| Timeline |
| Dunham Porategovernment |
| Aqr Large Cap |
Dunham Porategovernment and Aqr Large Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dunham Porategovernment and Aqr Large
The main advantage of trading using opposite Dunham Porategovernment and Aqr Large positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dunham Porategovernment position performs unexpectedly, Aqr Large 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 Large will offset losses from the drop in Aqr Large's long position.| Dunham Porategovernment vs. Ab Small Cap | Dunham Porategovernment vs. Vy Columbia Small | Dunham Porategovernment vs. Old Westbury Small | Dunham Porategovernment vs. Pace Smallmedium Value |
| Aqr Large vs. Aqr Large Cap | Aqr Large vs. Aqr International Defensive | Aqr Large vs. Aqr International Defensive | Aqr Large 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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