Correlation Between Western Asset and Aqr Risk
Can any of the company-specific risk be diversified away by investing in both Western Asset and Aqr Risk 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 Western Asset and Aqr Risk into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Western Asset Inflation and Aqr Risk Balanced Modities, you can compare the effects of market volatilities on Western Asset and Aqr Risk 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 Western Asset with a short position of Aqr Risk. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Asset and Aqr Risk.
Diversification Opportunities for Western Asset and Aqr Risk
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Western and Aqr is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Western Asset Inflation and Aqr Risk Balanced Modities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aqr Risk Balanced and Western Asset 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 Western Asset Inflation are associated (or correlated) with Aqr Risk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aqr Risk Balanced has no effect on the direction of Western Asset i.e., Western Asset and Aqr Risk go up and down completely randomly.
Pair Corralation between Western Asset and Aqr Risk
Assuming the 90 days horizon Western Asset Inflation is expected to under-perform the Aqr Risk. But the mutual fund apears to be less risky and, when comparing its historical volatility, Western Asset Inflation is 2.52 times less risky than Aqr Risk. The mutual fund trades about -0.06 of its potential returns per unit of risk. The Aqr Risk Balanced Modities is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 851.00 in Aqr Risk Balanced Modities on September 12, 2024 and sell it today you would earn a total of 44.00 from holding Aqr Risk Balanced Modities or generate 5.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Western Asset Inflation vs. Aqr Risk Balanced Modities
Performance |
| Timeline |
| Western Asset Inflation |
| Aqr Risk Balanced |
Western Asset and Aqr Risk Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Asset and Aqr Risk
The main advantage of trading using opposite Western Asset and Aqr Risk positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Asset position performs unexpectedly, Aqr Risk 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 Risk will offset losses from the drop in Aqr Risk's long position.| Western Asset vs. Dimensional Retirement Income | Western Asset vs. Sierra E Retirement | Western Asset vs. Fidelity Managed Retirement | Western Asset vs. Saat Moderate Strategy |
| Aqr Risk vs. Ab Global Risk | Aqr Risk vs. Lgm Risk Managed | Aqr Risk vs. Siit High Yield | Aqr Risk vs. Franklin High Income |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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