Correlation Between Aqr Large and Aim Investment
Can any of the company-specific risk be diversified away by investing in both Aqr Large and Aim Investment 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 Aim Investment 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 Aim Investment Secs, you can compare the effects of market volatilities on Aqr Large and Aim Investment 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 Aim Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aqr Large and Aim Investment.
Diversification Opportunities for Aqr Large and Aim Investment
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Aqr and Aim is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Aqr Large Cap and Aim Investment Secs in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aim Investment Secs 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 Aim Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aim Investment Secs has no effect on the direction of Aqr Large i.e., Aqr Large and Aim Investment go up and down completely randomly.
Pair Corralation between Aqr Large and Aim Investment
Assuming the 90 days horizon Aqr Large Cap is expected to generate 8.62 times more return on investment than Aim Investment. However, Aqr Large is 8.62 times more volatile than Aim Investment Secs. It trades about 0.04 of its potential returns per unit of risk. Aim Investment Secs is currently generating about 0.13 per unit of risk. If you would invest 2,098 in Aqr Large Cap on September 3, 2024 and sell it today you would earn a total of 483.00 from holding Aqr Large Cap or generate 23.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aqr Large Cap vs. Aim Investment Secs
Performance |
| Timeline |
| Aqr Large Cap |
| Aim Investment Secs |
Aqr Large and Aim Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aqr Large and Aim Investment
The main advantage of trading using opposite Aqr Large and Aim Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aqr Large position performs unexpectedly, Aim Investment 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 Aim Investment will offset losses from the drop in Aim Investment's long position.| Aqr Large vs. Maryland Tax Free Bond | Aqr Large vs. Ambrus Core Bond | Aqr Large vs. Transamerica Funds | Aqr Large vs. Gmo High Yield |
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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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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