Correlation Between Aqr Diversified and Payden Global
Can any of the company-specific risk be diversified away by investing in both Aqr Diversified and Payden Global 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 Diversified and Payden Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aqr Diversified Arbitrage and Payden Global Low, you can compare the effects of market volatilities on Aqr Diversified and Payden Global 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 Diversified with a short position of Payden Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aqr Diversified and Payden Global.
Diversification Opportunities for Aqr Diversified and Payden Global
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Aqr and Payden is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Aqr Diversified Arbitrage and Payden Global Low in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Payden Global Low and Aqr Diversified 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 Diversified Arbitrage are associated (or correlated) with Payden Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Payden Global Low has no effect on the direction of Aqr Diversified i.e., Aqr Diversified and Payden Global go up and down completely randomly.
Pair Corralation between Aqr Diversified and Payden Global
Assuming the 90 days horizon Aqr Diversified Arbitrage is expected to generate 1.12 times more return on investment than Payden Global. However, Aqr Diversified is 1.12 times more volatile than Payden Global Low. It trades about 0.4 of its potential returns per unit of risk. Payden Global Low is currently generating about 0.27 per unit of risk. If you would invest 1,208 in Aqr Diversified Arbitrage on December 27, 2024 and sell it today you would earn a total of 32.00 from holding Aqr Diversified Arbitrage or generate 2.65% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Aqr Diversified Arbitrage vs. Payden Global Low
Performance |
Timeline |
Aqr Diversified Arbitrage |
Payden Global Low |
Aqr Diversified and Payden Global Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Aqr Diversified and Payden Global
The main advantage of trading using opposite Aqr Diversified and Payden Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aqr Diversified position performs unexpectedly, Payden Global 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 Payden Global will offset losses from the drop in Payden Global's long position.Aqr Diversified vs. Aqr Large Cap | Aqr Diversified vs. Aqr Large Cap | Aqr Diversified vs. Aqr International Defensive | Aqr Diversified vs. Aqr International Defensive |
Payden Global vs. Artisan High Income | Payden Global vs. Old Westbury Fixed | Payden Global vs. Goldman Sachs Short | Payden Global vs. Siit High Yield |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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