Correlation Between Abbey Capital and Aqr Managed
Can any of the company-specific risk be diversified away by investing in both Abbey Capital 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 Abbey Capital and Aqr Managed into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Abbey Capital Futures and Aqr Managed Futures, you can compare the effects of market volatilities on Abbey Capital 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 Abbey Capital with a short position of Aqr Managed. Check out your portfolio center. Please also check ongoing floating volatility patterns of Abbey Capital and Aqr Managed.
Diversification Opportunities for Abbey Capital and Aqr Managed
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Abbey and Aqr is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Abbey Capital Futures 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 Abbey Capital 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 Abbey Capital Futures 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 Abbey Capital i.e., Abbey Capital and Aqr Managed go up and down completely randomly.
Pair Corralation between Abbey Capital and Aqr Managed
Assuming the 90 days horizon Abbey Capital is expected to generate 32.0 times less return on investment than Aqr Managed. But when comparing it to its historical volatility, Abbey Capital Futures is 1.43 times less risky than Aqr Managed. It trades about 0.01 of its potential returns per unit of risk. 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 28, 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 | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Abbey Capital Futures vs. Aqr Managed Futures
Performance |
| Timeline |
| Abbey Capital Futures |
| Aqr Managed Futures |
Abbey Capital and Aqr Managed Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Abbey Capital and Aqr Managed
The main advantage of trading using opposite Abbey Capital and Aqr Managed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Abbey Capital 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.| Abbey Capital vs. Abbey Capital Multi | Abbey Capital vs. Vanguard 500 Index | Abbey Capital vs. Vanguard Target Retirement | Abbey Capital vs. Fidelity Balanced Fund |
| 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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