Correlation Between Aqr Large and Franklin Mutual
Can any of the company-specific risk be diversified away by investing in both Aqr Large and Franklin Mutual 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 Franklin Mutual 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 Franklin Mutual Global, you can compare the effects of market volatilities on Aqr Large and Franklin Mutual 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 Franklin Mutual. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aqr Large and Franklin Mutual.
Diversification Opportunities for Aqr Large and Franklin Mutual
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Aqr and Franklin is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Aqr Large Cap and Franklin Mutual Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Mutual Global 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 Franklin Mutual. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Mutual Global has no effect on the direction of Aqr Large i.e., Aqr Large and Franklin Mutual go up and down completely randomly.
Pair Corralation between Aqr Large and Franklin Mutual
Assuming the 90 days horizon Aqr Large Cap is expected to generate 1.62 times more return on investment than Franklin Mutual. However, Aqr Large is 1.62 times more volatile than Franklin Mutual Global. It trades about 0.11 of its potential returns per unit of risk. Franklin Mutual Global is currently generating about 0.05 per unit of risk. If you would invest 2,219 in Aqr Large Cap on September 1, 2024 and sell it today you would earn a total of 362.00 from holding Aqr Large Cap or generate 16.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aqr Large Cap vs. Franklin Mutual Global
Performance |
| Timeline |
| Aqr Large Cap |
| Franklin Mutual Global |
Aqr Large and Franklin Mutual Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aqr Large and Franklin Mutual
The main advantage of trading using opposite Aqr Large and Franklin Mutual positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aqr Large position performs unexpectedly, Franklin Mutual 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 Franklin Mutual will offset losses from the drop in Franklin Mutual'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 |
| Franklin Mutual vs. Doubleline Emerging Markets | Franklin Mutual vs. Dws Emerging Markets | Franklin Mutual vs. Rbc Emerging Markets | Franklin Mutual vs. Ep Emerging Markets |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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