Correlation Between Artisan Emerging and Aqr Long-short
Can any of the company-specific risk be diversified away by investing in both Artisan Emerging and Aqr Long-short 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 Artisan Emerging and Aqr Long-short into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Artisan Emerging Markets and Aqr Long Short Equity, you can compare the effects of market volatilities on Artisan Emerging and Aqr Long-short 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 Artisan Emerging with a short position of Aqr Long-short. Check out your portfolio center. Please also check ongoing floating volatility patterns of Artisan Emerging and Aqr Long-short.
Diversification Opportunities for Artisan Emerging and Aqr Long-short
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Artisan and Aqr is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Artisan Emerging Markets 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 Artisan Emerging 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 Artisan Emerging Markets are associated (or correlated) with Aqr Long-short. 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 Artisan Emerging i.e., Artisan Emerging and Aqr Long-short go up and down completely randomly.
Pair Corralation between Artisan Emerging and Aqr Long-short
Assuming the 90 days horizon Artisan Emerging is expected to generate 3.07 times less return on investment than Aqr Long-short. But when comparing it to its historical volatility, Artisan Emerging Markets is 1.89 times less risky than Aqr Long-short. It trades about 0.15 of its potential returns per unit of risk. Aqr Long Short Equity is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 1,081 in Aqr Long Short Equity on August 31, 2024 and sell it today you would earn a total of 558.00 from holding Aqr Long Short Equity or generate 51.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Artisan Emerging Markets vs. Aqr Long Short Equity
Performance |
| Timeline |
| Artisan Emerging Markets |
| Aqr Long Short |
Artisan Emerging and Aqr Long-short Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Artisan Emerging and Aqr Long-short
The main advantage of trading using opposite Artisan Emerging and Aqr Long-short positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Artisan Emerging position performs unexpectedly, Aqr Long-short 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-short will offset losses from the drop in Aqr Long-short's long position.| Artisan Emerging vs. T Rowe Price | Artisan Emerging vs. Chestnut Street Exchange | Artisan Emerging vs. Legg Mason Partners | Artisan Emerging vs. Franklin Government Money |
| Aqr Long-short vs. L Abbett Growth | Aqr Long-short vs. Growth Opportunities Fund | Aqr Long-short vs. T Rowe Price | Aqr Long-short vs. Chase Growth 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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