Correlation Between Aqr Large and Salient Tactical
Can any of the company-specific risk be diversified away by investing in both Aqr Large and Salient Tactical 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 Salient Tactical 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 Salient Tactical Growth, you can compare the effects of market volatilities on Aqr Large and Salient Tactical 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 Salient Tactical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aqr Large and Salient Tactical.
Diversification Opportunities for Aqr Large and Salient Tactical
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Aqr and Salient is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Aqr Large Cap and Salient Tactical Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Salient Tactical Growth 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 Salient Tactical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Salient Tactical Growth has no effect on the direction of Aqr Large i.e., Aqr Large and Salient Tactical go up and down completely randomly.
Pair Corralation between Aqr Large and Salient Tactical
Assuming the 90 days horizon Aqr Large Cap is expected to generate 1.58 times more return on investment than Salient Tactical. However, Aqr Large is 1.58 times more volatile than Salient Tactical Growth. It trades about 0.12 of its potential returns per unit of risk. Salient Tactical Growth is currently generating about 0.12 per unit of risk. If you would invest 1,922 in Aqr Large Cap on September 14, 2024 and sell it today you would earn a total of 625.00 from holding Aqr Large Cap or generate 32.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aqr Large Cap vs. Salient Tactical Growth
Performance |
| Timeline |
| Aqr Large Cap |
| Salient Tactical Growth |
Aqr Large and Salient Tactical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aqr Large and Salient Tactical
The main advantage of trading using opposite Aqr Large and Salient Tactical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aqr Large position performs unexpectedly, Salient Tactical 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 Salient Tactical will offset losses from the drop in Salient Tactical'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 |
| Salient Tactical vs. Ftfa Franklin Templeton Growth | Salient Tactical vs. Smallcap Growth Fund | Salient Tactical vs. Franklin Growth Opportunities | Salient Tactical vs. Tfa Alphagen Growth |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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