Correlation Between Ab Discovery and Aqr Style
Can any of the company-specific risk be diversified away by investing in both Ab Discovery and Aqr Style 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 Discovery and Aqr Style into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ab Discovery Value and Aqr Style Premia, you can compare the effects of market volatilities on Ab Discovery and Aqr Style 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 Discovery with a short position of Aqr Style. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Discovery and Aqr Style.
Diversification Opportunities for Ab Discovery and Aqr Style
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between ABYSX and Aqr is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Ab Discovery Value and Aqr Style Premia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aqr Style Premia and Ab Discovery 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 Discovery Value are associated (or correlated) with Aqr Style. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aqr Style Premia has no effect on the direction of Ab Discovery i.e., Ab Discovery and Aqr Style go up and down completely randomly.
Pair Corralation between Ab Discovery and Aqr Style
Assuming the 90 days horizon Ab Discovery Value is expected to generate 1.1 times more return on investment than Aqr Style. However, Ab Discovery is 1.1 times more volatile than Aqr Style Premia. It trades about -0.01 of its potential returns per unit of risk. Aqr Style Premia is currently generating about -0.05 per unit of risk. If you would invest 2,589 in Ab Discovery Value on September 12, 2024 and sell it today you would lose (5.00) from holding Ab Discovery Value or give up 0.19% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ab Discovery Value vs. Aqr Style Premia
Performance |
| Timeline |
| Ab Discovery Value |
| Aqr Style Premia |
Ab Discovery and Aqr Style Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ab Discovery and Aqr Style
The main advantage of trading using opposite Ab Discovery and Aqr Style positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Discovery position performs unexpectedly, Aqr Style 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 Style will offset losses from the drop in Aqr Style's long position.| Ab Discovery vs. Ab Discovery Growth | Ab Discovery vs. Ab International Value | Ab Discovery vs. Small Cap Core | Ab Discovery vs. Ab International Growth |
| Aqr Style vs. Pnc Emerging Markets | Aqr Style vs. Eagle Mlp Strategy | Aqr Style vs. Shelton Emerging Markets | Aqr Style vs. Pace International Emerging |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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