Correlation Between Multisector Bond and Aqr Long-short
Can any of the company-specific risk be diversified away by investing in both Multisector Bond and Aqr Long-short 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 Multisector Bond and Aqr Long-short into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Multisector Bond Sma and Aqr Long Short Equity, you can compare the effects of market volatilities on Multisector Bond and Aqr Long-short 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 Multisector Bond with a short position of Aqr Long-short. Check out your portfolio center. Please also check ongoing floating volatility patterns of Multisector Bond and Aqr Long-short.
Diversification Opportunities for Multisector Bond and Aqr Long-short
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Multisector and Aqr is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Multisector Bond Sma and Aqr Long Short Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aqr Long Short and Multisector Bond 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 Multisector Bond Sma are associated (or correlated) with Aqr Long-short. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aqr Long Short has no effect on the direction of Multisector Bond i.e., Multisector Bond and Aqr Long-short go up and down completely randomly.
Pair Corralation between Multisector Bond and Aqr Long-short
Assuming the 90 days horizon Multisector Bond is expected to generate 9.28 times less return on investment than Aqr Long-short. In addition to that, Multisector Bond is 1.1 times more volatile than Aqr Long Short Equity. It trades about 0.04 of its total potential returns per unit of risk. Aqr Long Short Equity is currently generating about 0.45 per unit of volatility. If you would invest 1,388 in Aqr Long Short Equity on March 4, 2024 and sell it today you would earn a total of 165.00 from holding Aqr Long Short Equity or generate 11.89% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Multisector Bond Sma vs. Aqr Long Short Equity
Performance |
Timeline |
Multisector Bond Sma |
Aqr Long Short |
Multisector Bond and Aqr Long-short Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Multisector Bond and Aqr Long-short
The main advantage of trading using opposite Multisector Bond and Aqr Long-short positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Multisector Bond position performs unexpectedly, Aqr Long-short 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 Long-short will offset losses from the drop in Aqr Long-short's long position.Multisector Bond vs. Columbia Porate Income | Multisector Bond vs. Columbia Ultra Short | Multisector Bond vs. Columbia Ultra Short | Multisector Bond vs. Columbia Treasury Index |
Aqr Long-short vs. Aqr Large Cap | Aqr Long-short vs. Aqr Large Cap | Aqr Long-short vs. Aqr International Defensive | Aqr Long-short vs. Aqr International Defensive |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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