Correlation Between Sit Government and Aqr Diversified
Can any of the company-specific risk be diversified away by investing in both Sit Government 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 Sit Government and Aqr Diversified into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sit Government Securities and Aqr Diversified Arbitrage, you can compare the effects of market volatilities on Sit Government 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 Sit Government with a short position of Aqr Diversified. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sit Government and Aqr Diversified.
Diversification Opportunities for Sit Government and Aqr Diversified
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Sit and Aqr is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Sit Government Securities 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 Sit Government 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 Sit Government Securities 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 Sit Government i.e., Sit Government and Aqr Diversified go up and down completely randomly.
Pair Corralation between Sit Government and Aqr Diversified
Assuming the 90 days horizon Sit Government is expected to generate 1.13 times less return on investment than Aqr Diversified. In addition to that, Sit Government is 1.18 times more volatile than Aqr Diversified Arbitrage. It trades about 0.05 of its total potential returns per unit of risk. Aqr Diversified Arbitrage is currently generating about 0.06 per unit of volatility. If you would invest 1,133 in Aqr Diversified Arbitrage on September 13, 2024 and sell it today you would earn a total of 88.00 from holding Aqr Diversified Arbitrage or generate 7.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sit Government Securities vs. Aqr Diversified Arbitrage
Performance |
| Timeline |
| Sit Government Securities |
| Aqr Diversified Arbitrage |
Sit Government and Aqr Diversified Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sit Government and Aqr Diversified
The main advantage of trading using opposite Sit Government and Aqr Diversified positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sit Government 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.| Sit Government vs. Sit Small Cap | Sit Government vs. Sit Global Dividend | Sit Government vs. Sit Global Dividend | Sit Government vs. Sit Small Cap |
| 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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