Correlation Between Aqr Large and L Abbett
Can any of the company-specific risk be diversified away by investing in both Aqr Large and L Abbett 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 L Abbett 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 L Abbett Growth, you can compare the effects of market volatilities on Aqr Large and L Abbett 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 L Abbett. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aqr Large and L Abbett.
Diversification Opportunities for Aqr Large and L Abbett
Good diversification
The 3 months correlation between Aqr and LGLSX is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Aqr Large Cap and L Abbett Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on L Abbett 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 L Abbett. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of L Abbett Growth has no effect on the direction of Aqr Large i.e., Aqr Large and L Abbett go up and down completely randomly.
Pair Corralation between Aqr Large and L Abbett
Assuming the 90 days horizon Aqr Large is expected to generate 2.73 times less return on investment than L Abbett. But when comparing it to its historical volatility, Aqr Large Cap is 1.13 times less risky than L Abbett. It trades about 0.04 of its potential returns per unit of risk. L Abbett Growth is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 2,646 in L Abbett Growth on October 26, 2024 and sell it today you would earn a total of 2,407 from holding L Abbett Growth or generate 90.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aqr Large Cap vs. L Abbett Growth
Performance |
| Timeline |
| Aqr Large Cap |
| L Abbett Growth |
Aqr Large and L Abbett Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aqr Large and L Abbett
The main advantage of trading using opposite Aqr Large and L Abbett positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aqr Large position performs unexpectedly, L Abbett 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 L Abbett will offset losses from the drop in L Abbett's long position.| Aqr Large vs. Guggenheim Managed Futures | Aqr Large vs. Fidelity Sai Inflationfocused | Aqr Large vs. Short Duration Inflation | Aqr Large vs. Cref Inflation Linked Bond |
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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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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