Correlation Between Aqr Managed and Voya Index

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Can any of the company-specific risk be diversified away by investing in both Aqr Managed and Voya Index 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 Voya Index 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 Voya Index Solution, you can compare the effects of market volatilities on Aqr Managed and Voya Index 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 Voya Index. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aqr Managed and Voya Index.

Diversification Opportunities for Aqr Managed and Voya Index

0.73
  Correlation Coefficient

Poor diversification

The 3 months correlation between Aqr and Voya is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Aqr Managed Futures and Voya Index Solution in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voya Index Solution 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 Voya Index. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voya Index Solution has no effect on the direction of Aqr Managed i.e., Aqr Managed and Voya Index go up and down completely randomly.

Pair Corralation between Aqr Managed and Voya Index

Assuming the 90 days horizon Aqr Managed Futures is expected to generate 1.93 times more return on investment than Voya Index. However, Aqr Managed is 1.93 times more volatile than Voya Index Solution. It trades about 0.22 of its potential returns per unit of risk. Voya Index Solution is currently generating about 0.22 per unit of risk. If you would invest  854.00  in Aqr Managed Futures on September 13, 2024 and sell it today you would earn a total of  25.00  from holding Aqr Managed Futures or generate 2.93% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy95.45%
ValuesDaily Returns

Aqr Managed Futures  vs.  Voya Index Solution

 Performance 
       Timeline  
Aqr Managed Futures 

Risk-Adjusted Performance

6 of 100

 
Weak
 
Strong
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in Aqr Managed Futures are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Aqr Managed is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
Voya Index Solution 

Risk-Adjusted Performance

9 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Voya Index Solution are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Voya Index is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Aqr Managed and Voya Index Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Aqr Managed and Voya Index

The main advantage of trading using opposite Aqr Managed and Voya Index positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aqr Managed position performs unexpectedly, Voya Index 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 Voya Index will offset losses from the drop in Voya Index's long position.
The idea behind Aqr Managed Futures and Voya Index Solution pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.

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