Correlation Between Dunham Porategovernment and Aqr Diversified
Can any of the company-specific risk be diversified away by investing in both Dunham Porategovernment 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 Porategovernment 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 Porategovernment 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 Porategovernment with a short position of Aqr Diversified. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dunham Porategovernment and Aqr Diversified.
Diversification Opportunities for Dunham Porategovernment and Aqr Diversified
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Dunham and Aqr is 0.33. 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 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 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 Porategovernment i.e., Dunham Porategovernment and Aqr Diversified go up and down completely randomly.
Pair Corralation between Dunham Porategovernment and Aqr Diversified
Assuming the 90 days horizon Dunham Porategovernment Bond is expected to generate 1.42 times more return on investment than Aqr Diversified. However, Dunham Porategovernment is 1.42 times more volatile than Aqr Diversified Arbitrage. It trades about 0.05 of its potential returns per unit of risk. Aqr Diversified Arbitrage is currently generating about 0.06 per unit of risk. If you would invest 1,158 in Dunham Porategovernment Bond on September 13, 2024 and sell it today you would earn a total of 104.00 from holding Dunham Porategovernment Bond or generate 8.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dunham Porategovernment Bond vs. Aqr Diversified Arbitrage
Performance |
| Timeline |
| Dunham Porategovernment |
| Aqr Diversified Arbitrage |
Dunham Porategovernment and Aqr Diversified Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dunham Porategovernment and Aqr Diversified
The main advantage of trading using opposite Dunham Porategovernment and Aqr Diversified positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dunham Porategovernment 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.| 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 Diversified vs. Sit Government Securities | Aqr Diversified vs. Dunham Porategovernment Bond | Aqr Diversified vs. Intermediate Government Bond | Aqr Diversified vs. Lord Abbett Government |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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