Correlation Between Akre Focus and Aqr Diversified
Can any of the company-specific risk be diversified away by investing in both Akre Focus and Aqr Diversified 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 Akre Focus and Aqr Diversified into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Akre Focus Fund and Aqr Diversified Arbitrage, you can compare the effects of market volatilities on Akre Focus and Aqr Diversified 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 Akre Focus with a short position of Aqr Diversified. Check out your portfolio center. Please also check ongoing floating volatility patterns of Akre Focus and Aqr Diversified.
Diversification Opportunities for Akre Focus and Aqr Diversified
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Akre and AQR is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Akre Focus Fund and Aqr Diversified Arbitrage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aqr Diversified Arbitrage and Akre Focus 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 Akre Focus Fund are associated (or correlated) with Aqr Diversified. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aqr Diversified Arbitrage has no effect on the direction of Akre Focus i.e., Akre Focus and Aqr Diversified go up and down completely randomly.
Pair Corralation between Akre Focus and Aqr Diversified
Assuming the 90 days horizon Akre Focus Fund is expected to generate 4.08 times more return on investment than Aqr Diversified. However, Akre Focus is 4.08 times more volatile than Aqr Diversified Arbitrage. It trades about 0.08 of its potential returns per unit of risk. Aqr Diversified Arbitrage is currently generating about 0.06 per unit of risk. If you would invest 5,295 in Akre Focus Fund on August 26, 2024 and sell it today you would earn a total of 2,107 from holding Akre Focus Fund or generate 39.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Akre Focus Fund vs. Aqr Diversified Arbitrage
Performance |
| Timeline |
| Akre Focus Fund |
| Aqr Diversified Arbitrage |
Akre Focus and Aqr Diversified Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Akre Focus and Aqr Diversified
The main advantage of trading using opposite Akre Focus and Aqr Diversified positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Akre Focus position performs unexpectedly, Aqr Diversified 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 Diversified will offset losses from the drop in Aqr Diversified's long position.| Akre Focus vs. Osterweis Strategic Income | Akre Focus vs. Doubleline Low Duration | Akre Focus vs. Doubleline Total Return | Akre Focus vs. Primecap Odyssey Growth |
| Aqr Diversified vs. Aqr Large Cap | Aqr Diversified vs. Aqr Large Cap | Aqr Diversified vs. Aqr International Defensive | Aqr Diversified 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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