Correlation Between Aqr Large and Federated Max-cap
Can any of the company-specific risk be diversified away by investing in both Aqr Large and Federated Max-cap 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 Federated Max-cap 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 Federated Max Cap Index, you can compare the effects of market volatilities on Aqr Large and Federated Max-cap 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 Federated Max-cap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aqr Large and Federated Max-cap.
Diversification Opportunities for Aqr Large and Federated Max-cap
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Aqr and Federated is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Aqr Large Cap and Federated Max Cap Index in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated Max Cap 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 Federated Max-cap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federated Max Cap has no effect on the direction of Aqr Large i.e., Aqr Large and Federated Max-cap go up and down completely randomly.
Pair Corralation between Aqr Large and Federated Max-cap
Assuming the 90 days horizon Aqr Large Cap is expected to generate 1.28 times more return on investment than Federated Max-cap. However, Aqr Large is 1.28 times more volatile than Federated Max Cap Index. It trades about 0.37 of its potential returns per unit of risk. Federated Max Cap Index is currently generating about 0.37 per unit of risk. If you would invest 2,395 in Aqr Large Cap on September 4, 2024 and sell it today you would earn a total of 183.00 from holding Aqr Large Cap or generate 7.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aqr Large Cap vs. Federated Max Cap Index
Performance |
| Timeline |
| Aqr Large Cap |
| Federated Max Cap |
Aqr Large and Federated Max-cap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aqr Large and Federated Max-cap
The main advantage of trading using opposite Aqr Large and Federated Max-cap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aqr Large position performs unexpectedly, Federated Max-cap 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 Federated Max-cap will offset losses from the drop in Federated Max-cap's long position.| Aqr Large vs. Advent Claymore Convertible | Aqr Large vs. Gabelli Convertible And | Aqr Large vs. Lord Abbett Convertible | Aqr Large vs. Absolute Convertible Arbitrage |
| Federated Max-cap vs. Federated Mdt Large | Federated Max-cap vs. Federated Mdt Mid Cap | Federated Max-cap vs. Federated U S | Federated Max-cap vs. Federated Mid Cap Index |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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