Correlation Between Aqr Large and Oakmark International
Can any of the company-specific risk be diversified away by investing in both Aqr Large and Oakmark International 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 Oakmark International 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 Oakmark International, you can compare the effects of market volatilities on Aqr Large and Oakmark International 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 Oakmark International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aqr Large and Oakmark International.
Diversification Opportunities for Aqr Large and Oakmark International
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Aqr and Oakmark is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Aqr Large Cap and Oakmark International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oakmark International 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 Oakmark International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oakmark International has no effect on the direction of Aqr Large i.e., Aqr Large and Oakmark International go up and down completely randomly.
Pair Corralation between Aqr Large and Oakmark International
Assuming the 90 days horizon Aqr Large Cap is expected to generate 1.3 times more return on investment than Oakmark International. However, Aqr Large is 1.3 times more volatile than Oakmark International. It trades about 0.09 of its potential returns per unit of risk. Oakmark International is currently generating about 0.04 per unit of risk. If you would invest 1,969 in Aqr Large Cap on September 1, 2024 and sell it today you would earn a total of 612.00 from holding Aqr Large Cap or generate 31.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.63% |
| Values | Daily Returns |
Aqr Large Cap vs. Oakmark International
Performance |
| Timeline |
| Aqr Large Cap |
| Oakmark International |
Aqr Large and Oakmark International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aqr Large and Oakmark International
The main advantage of trading using opposite Aqr Large and Oakmark International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aqr Large position performs unexpectedly, Oakmark International 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 Oakmark International will offset losses from the drop in Oakmark International'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 Long Short Equity |
| Oakmark International vs. Legg Mason Partners | Oakmark International vs. Western Asset High | Oakmark International vs. Lgm Risk Managed | Oakmark International vs. Franklin High Income |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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