Correlation Between Aqr Global and Aqr International
Can any of the company-specific risk be diversified away by investing in both Aqr Global and Aqr International 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 Global and Aqr International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aqr Global Equity and Aqr International Defensive, you can compare the effects of market volatilities on Aqr Global and Aqr International 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 Global with a short position of Aqr International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aqr Global and Aqr International.
Diversification Opportunities for Aqr Global and Aqr International
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Aqr and Aqr is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Aqr Global Equity and Aqr International Defensive in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aqr International and Aqr Global 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 Global Equity are associated (or correlated) with Aqr International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aqr International has no effect on the direction of Aqr Global i.e., Aqr Global and Aqr International go up and down completely randomly.
Pair Corralation between Aqr Global and Aqr International
Assuming the 90 days horizon Aqr Global Equity is expected to generate 1.07 times more return on investment than Aqr International. However, Aqr Global is 1.07 times more volatile than Aqr International Defensive. It trades about 0.22 of its potential returns per unit of risk. Aqr International Defensive is currently generating about -0.2 per unit of risk. If you would invest 1,164 in Aqr Global Equity on August 27, 2024 and sell it today you would earn a total of 38.00 from holding Aqr Global Equity or generate 3.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aqr Global Equity vs. Aqr International Defensive
Performance |
| Timeline |
| Aqr Global Equity |
| Aqr International |
Aqr Global and Aqr International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aqr Global and Aqr International
The main advantage of trading using opposite Aqr Global and Aqr International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aqr Global position performs unexpectedly, Aqr International 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 International will offset losses from the drop in Aqr International's long position.| Aqr Global vs. Aqr Large Cap | Aqr Global vs. Aqr Large Cap | Aqr Global vs. Aqr International Defensive | Aqr Global vs. Aqr International Defensive |
| Aqr International vs. Aqr Large Cap | Aqr International vs. Aqr Large Cap | Aqr International vs. Aqr International Defensive | Aqr International vs. Aqr Long Short Equity |
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 Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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