Correlation Between Aqr Large and Federated Kaufmann
Can any of the company-specific risk be diversified away by investing in both Aqr Large and Federated Kaufmann 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 Kaufmann 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 Kaufmann Large, you can compare the effects of market volatilities on Aqr Large and Federated Kaufmann 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 Kaufmann. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aqr Large and Federated Kaufmann.
Diversification Opportunities for Aqr Large and Federated Kaufmann
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 Kaufmann Large in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated Kaufmann Large 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 Kaufmann. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federated Kaufmann Large has no effect on the direction of Aqr Large i.e., Aqr Large and Federated Kaufmann go up and down completely randomly.
Pair Corralation between Aqr Large and Federated Kaufmann
Assuming the 90 days horizon Aqr Large Cap is expected to generate 1.04 times more return on investment than Federated Kaufmann. However, Aqr Large is 1.04 times more volatile than Federated Kaufmann Large. It trades about 0.11 of its potential returns per unit of risk. Federated Kaufmann Large is currently generating about 0.11 per unit of risk. If you would invest 2,218 in Aqr Large Cap on September 2, 2024 and sell it today you would earn a total of 363.00 from holding Aqr Large Cap or generate 16.37% 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 Kaufmann Large
Performance |
| Timeline |
| Aqr Large Cap |
| Federated Kaufmann Large |
Aqr Large and Federated Kaufmann Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aqr Large and Federated Kaufmann
The main advantage of trading using opposite Aqr Large and Federated Kaufmann positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aqr Large position performs unexpectedly, Federated Kaufmann 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 Kaufmann will offset losses from the drop in Federated Kaufmann's long position.| Aqr Large vs. Aqr Long Short Equity | Aqr Large vs. Old Westbury Short Term | Aqr Large vs. Federated Ultrashort Bond | Aqr Large vs. Sterling Capital Short |
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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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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