Correlation Between Amazon and Aqr Style
Can any of the company-specific risk be diversified away by investing in both Amazon and Aqr Style 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 Amazon and Aqr Style into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amazon Inc and Aqr Style Premia, you can compare the effects of market volatilities on Amazon and Aqr Style 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 Amazon with a short position of Aqr Style. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amazon and Aqr Style.
Diversification Opportunities for Amazon and Aqr Style
Pay attention - limited upside
The 3 months correlation between Amazon and Aqr is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Amazon Inc and Aqr Style Premia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aqr Style Premia and Amazon 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 Amazon Inc are associated (or correlated) with Aqr Style. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aqr Style Premia has no effect on the direction of Amazon i.e., Amazon and Aqr Style go up and down completely randomly.
Pair Corralation between Amazon and Aqr Style
If you would invest 8,845 in Amazon Inc on September 5, 2024 and sell it today you would earn a total of 12,499 from holding Amazon Inc or generate 141.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Amazon Inc vs. Aqr Style Premia
Performance |
| Timeline |
| Amazon Inc |
| Aqr Style Premia |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Amazon and Aqr Style Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amazon and Aqr Style
The main advantage of trading using opposite Amazon and Aqr Style positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amazon position performs unexpectedly, Aqr Style 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 Aqr Style will offset losses from the drop in Aqr Style's long position.The idea behind Amazon Inc and Aqr Style Premia pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Aqr Style vs. Rational Strategic Allocation | Aqr Style vs. Scharf Global Opportunity | Aqr Style vs. T Rowe Price | Aqr Style vs. Old Westbury Large |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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