Correlation Between Aqr Global and Doubleline

Can any of the company-specific risk be diversified away by investing in both Aqr Global and Doubleline 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 Global and Doubleline into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Aqr Global Macro and Doubleline E Fixed, you can compare the effects of market volatilities on Aqr Global and Doubleline 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 Global with a short position of Doubleline. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aqr Global and Doubleline.

Diversification Opportunities for Aqr Global and Doubleline

0.42

Correlation Coefficient

Aqr Global  Doubleline

Very weak diversification

The 3 months correlation between Aqr and Doubleline is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Aqr Global Macro and Doubleline E Fixed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Doubleline E Fixed and Aqr Global 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 Global Macro are associated (or correlated) with Doubleline. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Doubleline E Fixed has no effect on the direction of Aqr Global i.e., Aqr Global and Doubleline go up and down completely randomly.

Pair Corralation between Aqr Global and Doubleline

Assuming the 90 days horizon Aqr Global Macro is expected to generate 1.76 times more return on investment than Doubleline. However, Aqr Global is 1.76 times more volatile than Doubleline E Fixed. It trades about 0.01 of its potential returns per unit of risk. Doubleline E Fixed is currently generating about -0.16 per unit of risk. If you would invest  942.00  in Aqr Global Macro on September 15, 2024 and sell it today you would earn a total of  1.00  from holding Aqr Global Macro or generate 0.11% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Aqr Global Macro  vs.  Doubleline E Fixed

Aqr Global Macro

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Aqr Global Macro has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Aqr Global is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Doubleline E Fixed

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Doubleline E Fixed has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Doubleline is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Aqr Global and Doubleline

The main advantage of trading using opposite Aqr Global and Doubleline positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aqr Global position performs unexpectedly, Doubleline 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 Doubleline will offset losses from the drop in Doubleline's long position.

The idea behind Aqr Global Macro and Doubleline E Fixed pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.