Correlation Between Aqr Managed and Voya Index
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 Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Aqr Managed Futures vs. Voya Index Solution
Performance |
| Timeline |
| Aqr Managed Futures |
| Voya Index Solution |
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.| Aqr Managed vs. Aqr Large Cap | Aqr Managed vs. Aqr Small Cap | Aqr Managed vs. Aqr Small Cap | Aqr Managed vs. Aqr Small Cap |
| Voya Index vs. Voya Bond Index | Voya Index vs. Voya Bond Index | Voya Index vs. Voya Limited Maturity | Voya Index vs. Voya Limited Maturity |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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