Correlation Between Aqr Large and Cohen Steers
Can any of the company-specific risk be diversified away by investing in both Aqr Large and Cohen Steers 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 Cohen Steers 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 Cohen Steers Real, you can compare the effects of market volatilities on Aqr Large and Cohen Steers 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 Cohen Steers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aqr Large and Cohen Steers.
Diversification Opportunities for Aqr Large and Cohen Steers
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Aqr and Cohen is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Aqr Large Cap and Cohen Steers Real in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cohen Steers Real 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 Cohen Steers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cohen Steers Real has no effect on the direction of Aqr Large i.e., Aqr Large and Cohen Steers go up and down completely randomly.
Pair Corralation between Aqr Large and Cohen Steers
Assuming the 90 days horizon Aqr Large Cap is expected to generate 1.62 times more return on investment than Cohen Steers. However, Aqr Large is 1.62 times more volatile than Cohen Steers Real. It trades about 0.02 of its potential returns per unit of risk. Cohen Steers Real is currently generating about -0.04 per unit of risk. If you would invest 2,559 in Aqr Large Cap on September 13, 2024 and sell it today you would earn a total of 6.00 from holding Aqr Large Cap or generate 0.23% 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. Cohen Steers Real
Performance |
| Timeline |
| Aqr Large Cap |
| Cohen Steers Real |
Aqr Large and Cohen Steers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aqr Large and Cohen Steers
The main advantage of trading using opposite Aqr Large and Cohen Steers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aqr Large position performs unexpectedly, Cohen Steers 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 Cohen Steers will offset losses from the drop in Cohen Steers' 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 |
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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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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