Correlation Between Aqr Large and Tfa Alphagen
Can any of the company-specific risk be diversified away by investing in both Aqr Large and Tfa Alphagen 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 Tfa Alphagen 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 Tfa Alphagen Growth, you can compare the effects of market volatilities on Aqr Large and Tfa Alphagen 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 Tfa Alphagen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aqr Large and Tfa Alphagen.
Diversification Opportunities for Aqr Large and Tfa Alphagen
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Aqr and Tfa is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Aqr Large Cap and Tfa Alphagen Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tfa Alphagen 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 Tfa Alphagen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tfa Alphagen Growth has no effect on the direction of Aqr Large i.e., Aqr Large and Tfa Alphagen go up and down completely randomly.
Pair Corralation between Aqr Large and Tfa Alphagen
Assuming the 90 days horizon Aqr Large Cap is expected to generate 1.25 times more return on investment than Tfa Alphagen. However, Aqr Large is 1.25 times more volatile than Tfa Alphagen Growth. It trades about 0.38 of its potential returns per unit of risk. Tfa Alphagen Growth is currently generating about 0.35 per unit of risk. If you would invest 2,395 in Aqr Large Cap on September 1, 2024 and sell it today you would earn a total of 186.00 from holding Aqr Large Cap or generate 7.77% 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. Tfa Alphagen Growth
Performance |
| Timeline |
| Aqr Large Cap |
| Tfa Alphagen Growth |
Aqr Large and Tfa Alphagen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aqr Large and Tfa Alphagen
The main advantage of trading using opposite Aqr Large and Tfa Alphagen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aqr Large position performs unexpectedly, Tfa Alphagen 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 Tfa Alphagen will offset losses from the drop in Tfa Alphagen'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 |
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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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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