Correlation Between Aqr Large and Horizon Active
Can any of the company-specific risk be diversified away by investing in both Aqr Large and Horizon Active 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 Horizon Active 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 Horizon Active Risk, you can compare the effects of market volatilities on Aqr Large and Horizon Active 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 Horizon Active. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aqr Large and Horizon Active.
Diversification Opportunities for Aqr Large and Horizon Active
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Aqr and Horizon is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Aqr Large Cap and Horizon Active Risk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Horizon Active Risk 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 Horizon Active. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Horizon Active Risk has no effect on the direction of Aqr Large i.e., Aqr Large and Horizon Active go up and down completely randomly.
Pair Corralation between Aqr Large and Horizon Active
Assuming the 90 days horizon Aqr Large Cap is expected to generate 1.45 times more return on investment than Horizon Active. However, Aqr Large is 1.45 times more volatile than Horizon Active Risk. It trades about 0.21 of its potential returns per unit of risk. Horizon Active Risk is currently generating about 0.02 per unit of risk. If you would invest 2,385 in Aqr Large Cap on August 29, 2024 and sell it today you would earn a total of 197.00 from holding Aqr Large Cap or generate 8.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 97.67% |
| Values | Daily Returns |
Aqr Large Cap vs. Horizon Active Risk
Performance |
| Timeline |
| Aqr Large Cap |
| Horizon Active Risk |
Aqr Large and Horizon Active Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aqr Large and Horizon Active
The main advantage of trading using opposite Aqr Large and Horizon Active positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aqr Large position performs unexpectedly, Horizon Active 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 Horizon Active will offset losses from the drop in Horizon Active's long position.| Aqr Large vs. Growth Fund Of | Aqr Large vs. HUMANA INC | Aqr Large vs. Aquagold International | Aqr Large vs. Barloworld Ltd ADR |
| Horizon Active vs. Aqr Large Cap | Horizon Active vs. Strategic Allocation Aggressive | Horizon Active vs. Hartford Moderate Allocation | Horizon Active vs. Old Westbury Large |
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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