Correlation Between Aqr Large and Aqr Managed
Can any of the company-specific risk be diversified away by investing in both Aqr Large 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 Aqr Large and Aqr Managed into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aqr Large Cap and Aqr Managed Futures, you can compare the effects of market volatilities on Aqr Large 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 Aqr Large with a short position of Aqr Managed. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aqr Large and Aqr Managed.
Diversification Opportunities for Aqr Large and Aqr Managed
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Aqr and Aqr is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Aqr Large Cap 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 Aqr Large 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 Large Cap 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 Aqr Large i.e., Aqr Large and Aqr Managed go up and down completely randomly.
Pair Corralation between Aqr Large and Aqr Managed
Assuming the 90 days horizon Aqr Large Cap is expected to generate 1.2 times more return on investment than Aqr Managed. However, Aqr Large is 1.2 times more volatile than Aqr Managed Futures. It trades about 0.2 of its potential returns per unit of risk. Aqr Managed Futures is currently generating about 0.0 per unit of risk. If you would invest 2,383 in Aqr Large Cap on August 25, 2024 and sell it today you would earn a total of 188.00 from holding Aqr Large Cap or generate 7.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aqr Large Cap vs. Aqr Managed Futures
Performance |
| Timeline |
| Aqr Large Cap |
| Aqr Managed Futures |
Aqr Large and Aqr Managed Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aqr Large and Aqr Managed
The main advantage of trading using opposite Aqr Large and Aqr Managed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aqr Large 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.| Aqr Large vs. Aqr Large Cap | Aqr Large vs. Aqr International Defensive | Aqr Large vs. Aqr International Defensive | Aqr Large vs. Aqr International Defensive |
| Aqr Managed vs. Prudential Health Sciences | Aqr Managed vs. Eventide Healthcare Life | Aqr Managed vs. Fidelity Advisor Health | Aqr Managed vs. Baillie Gifford Health |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
Other Complementary Tools
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine |