Correlation Between American Beacon and Aqr Managed
Can any of the company-specific risk be diversified away by investing in both American Beacon 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 American Beacon and Aqr Managed into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Beacon Ahl and Aqr Managed Futures, you can compare the effects of market volatilities on American Beacon 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 American Beacon with a short position of Aqr Managed. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Beacon and Aqr Managed.
Diversification Opportunities for American Beacon and Aqr Managed
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between American and Aqr is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding American Beacon Ahl 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 American Beacon 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 American Beacon Ahl 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 American Beacon i.e., American Beacon and Aqr Managed go up and down completely randomly.
Pair Corralation between American Beacon and Aqr Managed
Assuming the 90 days horizon American Beacon Ahl is expected to under-perform the Aqr Managed. But the mutual fund apears to be less risky and, when comparing its historical volatility, American Beacon Ahl is 1.12 times less risky than Aqr Managed. The mutual fund trades about -0.01 of its potential returns per unit of risk. The Aqr Managed Futures is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 748.00 in Aqr Managed Futures on October 25, 2024 and sell it today you would earn a total of 108.00 from holding Aqr Managed Futures or generate 14.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.8% |
| Values | Daily Returns |
American Beacon Ahl vs. Aqr Managed Futures
Performance |
| Timeline |
| American Beacon Ahl |
| Aqr Managed Futures |
American Beacon and Aqr Managed Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Beacon and Aqr Managed
The main advantage of trading using opposite American Beacon and Aqr Managed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Beacon 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.| American Beacon vs. Aqr Managed Futures | American Beacon vs. Pimco Trends Managed | American Beacon vs. Pimco Trends Managed | American Beacon vs. American Beacon Ahl |
| Aqr Managed vs. Ab Municipal Bond | Aqr Managed vs. Alpine Ultra Short | Aqr Managed vs. American High Income Municipal | Aqr Managed vs. Bbh Intermediate Municipal |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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