Correlation Between Aqr Equity and Dunham Corporate/govern
Can any of the company-specific risk be diversified away by investing in both Aqr Equity and Dunham Corporate/govern 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 Aqr Equity and Dunham Corporate/govern into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aqr Equity Market and Dunham Porategovernment Bond, you can compare the effects of market volatilities on Aqr Equity and Dunham Corporate/govern 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 Aqr Equity with a short position of Dunham Corporate/govern. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aqr Equity and Dunham Corporate/govern.
Diversification Opportunities for Aqr Equity and Dunham Corporate/govern
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Aqr and Dunham is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Aqr Equity Market and Dunham Porategovernment Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dunham Porategovernment and Aqr Equity 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 Aqr Equity Market are associated (or correlated) with Dunham Corporate/govern. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dunham Porategovernment has no effect on the direction of Aqr Equity i.e., Aqr Equity and Dunham Corporate/govern go up and down completely randomly.
Pair Corralation between Aqr Equity and Dunham Corporate/govern
Assuming the 90 days horizon Aqr Equity Market is expected to generate 1.35 times more return on investment than Dunham Corporate/govern. However, Aqr Equity is 1.35 times more volatile than Dunham Porategovernment Bond. It trades about 0.18 of its potential returns per unit of risk. Dunham Porategovernment Bond is currently generating about 0.08 per unit of risk. If you would invest 877.00 in Aqr Equity Market on September 2, 2024 and sell it today you would earn a total of 170.00 from holding Aqr Equity Market or generate 19.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aqr Equity Market vs. Dunham Porategovernment Bond
Performance |
| Timeline |
| Aqr Equity Market |
| Dunham Porategovernment |
Aqr Equity and Dunham Corporate/govern Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aqr Equity and Dunham Corporate/govern
The main advantage of trading using opposite Aqr Equity and Dunham Corporate/govern positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aqr Equity position performs unexpectedly, Dunham Corporate/govern 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 Dunham Corporate/govern will offset losses from the drop in Dunham Corporate/govern's long position.| Aqr Equity vs. Gabelli Gold Fund | Aqr Equity vs. Gamco Global Gold | Aqr Equity vs. Gold And Precious | Aqr Equity vs. Short Precious Metals |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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