Correlation Between 361 Global and Aqr Long
Can any of the company-specific risk be diversified away by investing in both 361 Global and Aqr Long 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 361 Global and Aqr Long into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between 361 Global Longshort and Aqr Long Short Equity, you can compare the effects of market volatilities on 361 Global and Aqr Long 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 361 Global with a short position of Aqr Long. Check out your portfolio center. Please also check ongoing floating volatility patterns of 361 Global and Aqr Long.
Diversification Opportunities for 361 Global and Aqr Long
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between 361 and Aqr is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding 361 Global Longshort and Aqr Long Short Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aqr Long Short and 361 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 361 Global Longshort are associated (or correlated) with Aqr Long. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aqr Long Short has no effect on the direction of 361 Global i.e., 361 Global and Aqr Long go up and down completely randomly.
Pair Corralation between 361 Global and Aqr Long
Assuming the 90 days horizon 361 Global is expected to generate 4.59 times less return on investment than Aqr Long. But when comparing it to its historical volatility, 361 Global Longshort is 1.02 times less risky than Aqr Long. It trades about 0.11 of its potential returns per unit of risk. Aqr Long Short Equity is currently generating about 0.48 of returns per unit of risk over similar time horizon. If you would invest 1,622 in Aqr Long Short Equity on September 5, 2024 and sell it today you would earn a total of 80.00 from holding Aqr Long Short Equity or generate 4.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
361 Global Longshort vs. Aqr Long Short Equity
Performance |
| Timeline |
| 361 Global Longshort |
| Aqr Long Short |
361 Global and Aqr Long Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with 361 Global and Aqr Long
The main advantage of trading using opposite 361 Global and Aqr Long positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 361 Global position performs unexpectedly, Aqr Long 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 Long will offset losses from the drop in Aqr Long's long position.| 361 Global vs. Swan Defined Risk | 361 Global vs. Boston Partners Longshort | 361 Global vs. 361 Global Longshort | 361 Global vs. Aqr Long Short Equity |
| Aqr Long vs. Aqr Large Cap | Aqr Long vs. Aqr Large Cap | Aqr Long vs. Aqr International Defensive | Aqr Long 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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