Correlation Between Aqr International and 1919 Financial
Can any of the company-specific risk be diversified away by investing in both Aqr International and 1919 Financial 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 Aqr International and 1919 Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aqr International Momentum and 1919 Financial Services, you can compare the effects of market volatilities on Aqr International and 1919 Financial 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 Aqr International with a short position of 1919 Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aqr International and 1919 Financial.
Diversification Opportunities for Aqr International and 1919 Financial
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Aqr and 1919 is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Aqr International Momentum and 1919 Financial Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 1919 Financial Services and Aqr International 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 Aqr International Momentum are associated (or correlated) with 1919 Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 1919 Financial Services has no effect on the direction of Aqr International i.e., Aqr International and 1919 Financial go up and down completely randomly.
Pair Corralation between Aqr International and 1919 Financial
Assuming the 90 days horizon Aqr International Momentum is expected to generate 0.28 times more return on investment than 1919 Financial. However, Aqr International Momentum is 3.6 times less risky than 1919 Financial. It trades about 0.12 of its potential returns per unit of risk. 1919 Financial Services is currently generating about -0.22 per unit of risk. If you would invest 1,750 in Aqr International Momentum on September 14, 2024 and sell it today you would earn a total of 29.00 from holding Aqr International Momentum or generate 1.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Aqr International Momentum vs. 1919 Financial Services
Performance |
| Timeline |
| Aqr International |
| 1919 Financial Services |
Aqr International and 1919 Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aqr International and 1919 Financial
The main advantage of trading using opposite Aqr International and 1919 Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aqr International position performs unexpectedly, 1919 Financial 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 1919 Financial will offset losses from the drop in 1919 Financial's long position.| Aqr International vs. Ishares Municipal Bond | Aqr International vs. Bbh Intermediate Municipal | Aqr International vs. T Rowe Price | Aqr International vs. Blrc Sgy Mnp |
| 1919 Financial vs. Gabelli Global Financial | 1919 Financial vs. Mesirow Financial Small | 1919 Financial vs. Icon Financial Fund | 1919 Financial vs. Prudential Jennison Financial |
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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