Correlation Between Ab Bond and Aqr Managed
Can any of the company-specific risk be diversified away by investing in both Ab Bond and Aqr Managed 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 Ab Bond and Aqr Managed into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ab Bond Inflation and Aqr Managed Futures, you can compare the effects of market volatilities on Ab Bond and Aqr Managed 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 Ab Bond with a short position of Aqr Managed. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Bond and Aqr Managed.
Diversification Opportunities for Ab Bond and Aqr Managed
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between ABNCX and Aqr is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Ab Bond Inflation and Aqr Managed Futures in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aqr Managed Futures and Ab 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 Ab Bond Inflation are associated (or correlated) with Aqr Managed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aqr Managed Futures has no effect on the direction of Ab Bond i.e., Ab Bond and Aqr Managed go up and down completely randomly.
Pair Corralation between Ab Bond and Aqr Managed
Assuming the 90 days horizon Ab Bond Inflation is expected to under-perform the Aqr Managed. But the mutual fund apears to be less risky and, when comparing its historical volatility, Ab Bond Inflation is 4.99 times less risky than Aqr Managed. The mutual fund trades about -0.03 of its potential returns per unit of risk. The Aqr Managed Futures is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 809.00 in Aqr Managed Futures on August 27, 2024 and sell it today you would earn a total of 30.00 from holding Aqr Managed Futures or generate 3.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ab Bond Inflation vs. Aqr Managed Futures
Performance |
| Timeline |
| Ab Bond Inflation |
| Aqr Managed Futures |
Ab Bond and Aqr Managed Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ab Bond and Aqr Managed
The main advantage of trading using opposite Ab Bond and Aqr Managed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Bond position performs unexpectedly, Aqr Managed 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 Managed will offset losses from the drop in Aqr Managed's long position.| Ab Bond vs. Goldman Sachs Large | Ab Bond vs. Federated Mdt Large | Ab Bond vs. T Rowe Price | Ab Bond vs. Aqr Large Cap |
| Aqr Managed vs. Aqr Large Cap | Aqr Managed vs. Aqr Large Cap | Aqr Managed vs. Aqr International Defensive | Aqr Managed 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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