Correlation Between Aqr International and Aqr Long
Can any of the company-specific risk be diversified away by investing in both Aqr International and Aqr Long 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 International and Aqr Long into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aqr International Defensive and Aqr Long Short Equity, you can compare the effects of market volatilities on Aqr International and Aqr Long 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 International with a short position of Aqr Long. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aqr International and Aqr Long.
Diversification Opportunities for Aqr International and Aqr Long
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Aqr and Aqr is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Aqr International Defensive and Aqr Long Short Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aqr Long Short and Aqr International 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 International Defensive are associated (or correlated) with Aqr Long. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aqr Long Short has no effect on the direction of Aqr International i.e., Aqr International and Aqr Long go up and down completely randomly.
Pair Corralation between Aqr International and Aqr Long
Assuming the 90 days horizon Aqr International is expected to generate 2.03 times less return on investment than Aqr Long. But when comparing it to its historical volatility, Aqr International Defensive is 1.15 times less risky than Aqr Long. It trades about 0.13 of its potential returns per unit of risk. Aqr Long Short Equity is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 1,699 in Aqr Long Short Equity on September 18, 2024 and sell it today you would earn a total of 41.00 from holding Aqr Long Short Equity or generate 2.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aqr International Defensive vs. Aqr Long Short Equity
Performance |
| Timeline |
| Aqr International |
| Aqr Long Short |
Aqr International and Aqr Long Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aqr International and Aqr Long
The main advantage of trading using opposite Aqr International and Aqr Long positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aqr International position performs unexpectedly, Aqr Long 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 Long will offset losses from the drop in Aqr Long's long position.| Aqr International vs. Aqr Large Cap | Aqr International vs. Aqr Large Cap | Aqr International vs. Aqr Long Short Equity | Aqr International vs. Aqr Long Short Equity |
| Aqr Long vs. Goldman Sachs Technology | Aqr Long vs. Technology Ultrasector Profund | Aqr Long vs. Towpath Technology | Aqr Long vs. Allianzgi Technology Fund |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
Other Complementary Tools
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency |