Correlation Between Aqr Managed and Anchor Risk
Can any of the company-specific risk be diversified away by investing in both Aqr Managed and Anchor Risk 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 Managed and Anchor Risk into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aqr Managed Futures and Anchor Risk Managed, you can compare the effects of market volatilities on Aqr Managed and Anchor Risk 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 Managed with a short position of Anchor Risk. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aqr Managed and Anchor Risk.
Diversification Opportunities for Aqr Managed and Anchor Risk
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between AQR and Anchor is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Aqr Managed Futures and Anchor Risk Managed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anchor Risk Managed and Aqr Managed 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 Managed Futures are associated (or correlated) with Anchor Risk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anchor Risk Managed has no effect on the direction of Aqr Managed i.e., Aqr Managed and Anchor Risk go up and down completely randomly.
Pair Corralation between Aqr Managed and Anchor Risk
Assuming the 90 days horizon Aqr Managed Futures is expected to generate 1.8 times more return on investment than Anchor Risk. However, Aqr Managed is 1.8 times more volatile than Anchor Risk Managed. It trades about 0.17 of its potential returns per unit of risk. Anchor Risk Managed is currently generating about 0.21 per unit of risk. If you would invest 839.00 in Aqr Managed Futures on September 4, 2024 and sell it today you would earn a total of 18.00 from holding Aqr Managed Futures or generate 2.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Aqr Managed Futures vs. Anchor Risk Managed
Performance |
| Timeline |
| Aqr Managed Futures |
| Anchor Risk Managed |
Aqr Managed and Anchor Risk Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aqr Managed and Anchor Risk
The main advantage of trading using opposite Aqr Managed and Anchor Risk positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aqr Managed position performs unexpectedly, Anchor Risk 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 Anchor Risk will offset losses from the drop in Anchor Risk's long position.| Aqr Managed vs. Aqr Large Cap | Aqr Managed vs. Aqr Large Cap | Aqr Managed vs. Aqr International Defensive | Aqr Managed vs. Aqr International Defensive |
| Anchor Risk vs. Anchor Tactical Credit | Anchor Risk vs. Catalystmillburn Hedge Strategy | Anchor Risk vs. Kensington Managed Income | Anchor Risk vs. Anchor Risk Managed |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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