Correlation Between Aqr Managed and Columbia Flexible
Can any of the company-specific risk be diversified away by investing in both Aqr Managed and Columbia Flexible 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 Columbia Flexible 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 Columbia Flexible Capital, you can compare the effects of market volatilities on Aqr Managed and Columbia Flexible 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 Columbia Flexible. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aqr Managed and Columbia Flexible.
Diversification Opportunities for Aqr Managed and Columbia Flexible
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between AQR and Columbia is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Aqr Managed Futures and Columbia Flexible Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Columbia Flexible Capital 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 Columbia Flexible. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Columbia Flexible Capital has no effect on the direction of Aqr Managed i.e., Aqr Managed and Columbia Flexible go up and down completely randomly.
Pair Corralation between Aqr Managed and Columbia Flexible
Assuming the 90 days horizon Aqr Managed is expected to generate 1.4 times less return on investment than Columbia Flexible. In addition to that, Aqr Managed is 1.61 times more volatile than Columbia Flexible Capital. It trades about 0.17 of its total potential returns per unit of risk. Columbia Flexible Capital is currently generating about 0.39 per unit of volatility. If you would invest 1,397 in Columbia Flexible Capital on September 4, 2024 and sell it today you would earn a total of 45.00 from holding Columbia Flexible Capital or generate 3.22% 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. Columbia Flexible Capital
Performance |
| Timeline |
| Aqr Managed Futures |
| Columbia Flexible Capital |
Aqr Managed and Columbia Flexible Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aqr Managed and Columbia Flexible
The main advantage of trading using opposite Aqr Managed and Columbia Flexible positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aqr Managed position performs unexpectedly, Columbia Flexible 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 Columbia Flexible will offset losses from the drop in Columbia Flexible'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 |
| Columbia Flexible vs. Columbia Porate Income | Columbia Flexible vs. Columbia Ultra Short | Columbia Flexible vs. Columbia Ultra Short | Columbia Flexible vs. Columbia Treasury Index |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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