Correlation Between Aqr Managed and Diamond Hill
Can any of the company-specific risk be diversified away by investing in both Aqr Managed and Diamond Hill 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 Diamond Hill 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 Diamond Hill Long Short, you can compare the effects of market volatilities on Aqr Managed and Diamond Hill 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 Diamond Hill. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aqr Managed and Diamond Hill.
Diversification Opportunities for Aqr Managed and Diamond Hill
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Aqr and Diamond is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Aqr Managed Futures and Diamond Hill Long Short in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Diamond Hill Long 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 Diamond Hill. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Diamond Hill Long has no effect on the direction of Aqr Managed i.e., Aqr Managed and Diamond Hill go up and down completely randomly.
Pair Corralation between Aqr Managed and Diamond Hill
Assuming the 90 days horizon Aqr Managed Futures is expected to generate 0.97 times more return on investment than Diamond Hill. However, Aqr Managed Futures is 1.03 times less risky than Diamond Hill. It trades about 0.28 of its potential returns per unit of risk. Diamond Hill Long Short is currently generating about -0.19 per unit of risk. If you would invest 847.00 in Aqr Managed Futures on August 25, 2024 and sell it today you would earn a total of 26.00 from holding Aqr Managed Futures or generate 3.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aqr Managed Futures vs. Diamond Hill Long Short
Performance |
| Timeline |
| Aqr Managed Futures |
| Diamond Hill Long |
Aqr Managed and Diamond Hill Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aqr Managed and Diamond Hill
The main advantage of trading using opposite Aqr Managed and Diamond Hill positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aqr Managed position performs unexpectedly, Diamond Hill 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 Diamond Hill will offset losses from the drop in Diamond Hill'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 |
| Diamond Hill vs. Gateway Fund Class | Diamond Hill vs. Aqr Managed Futures | Diamond Hill vs. Boston Partners Longshort | Diamond Hill vs. Calamos Market Neutral |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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