Correlation Between Doubleline Emerging and Aqr International
Can any of the company-specific risk be diversified away by investing in both Doubleline Emerging and Aqr International 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 Doubleline Emerging and Aqr International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Doubleline Emerging Markets and Aqr International Defensive, you can compare the effects of market volatilities on Doubleline Emerging and Aqr International 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 Doubleline Emerging with a short position of Aqr International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Doubleline Emerging and Aqr International.
Diversification Opportunities for Doubleline Emerging and Aqr International
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Doubleline and Aqr is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Doubleline Emerging Markets and Aqr International Defensive in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aqr International and Doubleline Emerging 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 Doubleline Emerging Markets are associated (or correlated) with Aqr International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aqr International has no effect on the direction of Doubleline Emerging i.e., Doubleline Emerging and Aqr International go up and down completely randomly.
Pair Corralation between Doubleline Emerging and Aqr International
Assuming the 90 days horizon Doubleline Emerging Markets is expected to generate 0.72 times more return on investment than Aqr International. However, Doubleline Emerging Markets is 1.39 times less risky than Aqr International. It trades about -0.14 of its potential returns per unit of risk. Aqr International Defensive is currently generating about -0.21 per unit of risk. If you would invest 861.00 in Doubleline Emerging Markets on August 29, 2024 and sell it today you would lose (12.00) from holding Doubleline Emerging Markets or give up 1.39% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Doubleline Emerging Markets vs. Aqr International Defensive
Performance |
| Timeline |
| Doubleline Emerging |
| Aqr International |
Doubleline Emerging and Aqr International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Doubleline Emerging and Aqr International
The main advantage of trading using opposite Doubleline Emerging and Aqr International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Doubleline Emerging position performs unexpectedly, Aqr International 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 International will offset losses from the drop in Aqr International's long position.The idea behind Doubleline Emerging Markets and Aqr International Defensive 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.
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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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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