Correlation Between Aqr Large and Ultra Fund
Can any of the company-specific risk be diversified away by investing in both Aqr Large and Ultra Fund 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 Ultra Fund 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 Ultra Fund A, you can compare the effects of market volatilities on Aqr Large and Ultra Fund 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 Ultra Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aqr Large and Ultra Fund.
Diversification Opportunities for Aqr Large and Ultra Fund
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Aqr and Ultra is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Aqr Large Cap and Ultra Fund A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ultra Fund A 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 Ultra Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ultra Fund A has no effect on the direction of Aqr Large i.e., Aqr Large and Ultra Fund go up and down completely randomly.
Pair Corralation between Aqr Large and Ultra Fund
Assuming the 90 days horizon Aqr Large Cap is expected to generate 1.0 times more return on investment than Ultra Fund. However, Aqr Large Cap is 1.0 times less risky than Ultra Fund. It trades about 0.38 of its potential returns per unit of risk. Ultra Fund A is currently generating about 0.3 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 | 95.45% |
| Values | Daily Returns |
Aqr Large Cap vs. Ultra Fund A
Performance |
| Timeline |
| Aqr Large Cap |
| Ultra Fund A |
Aqr Large and Ultra Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aqr Large and Ultra Fund
The main advantage of trading using opposite Aqr Large and Ultra Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aqr Large position performs unexpectedly, Ultra Fund 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 Ultra Fund will offset losses from the drop in Ultra Fund'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 |
| Ultra Fund vs. Aqr Large Cap | Ultra Fund vs. Jhancock Disciplined Value | Ultra Fund vs. Qs Large Cap | Ultra Fund vs. T Rowe Price |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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