Correlation Between Aqr Managed and Lifestyle
Can any of the company-specific risk be diversified away by investing in both Aqr Managed and Lifestyle 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 Lifestyle 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 Lifestyle Ii Moderate, you can compare the effects of market volatilities on Aqr Managed and Lifestyle 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 Lifestyle. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aqr Managed and Lifestyle.
Diversification Opportunities for Aqr Managed and Lifestyle
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Aqr and Lifestyle is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Aqr Managed Futures and Lifestyle Ii Moderate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lifestyle Ii Moderate 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 Lifestyle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lifestyle Ii Moderate has no effect on the direction of Aqr Managed i.e., Aqr Managed and Lifestyle go up and down completely randomly.
Pair Corralation between Aqr Managed and Lifestyle
Assuming the 90 days horizon Aqr Managed is expected to generate 1.95 times less return on investment than Lifestyle. In addition to that, Aqr Managed is 1.45 times more volatile than Lifestyle Ii Moderate. It trades about 0.03 of its total potential returns per unit of risk. Lifestyle Ii Moderate is currently generating about 0.09 per unit of volatility. If you would invest 937.00 in Lifestyle Ii Moderate on September 2, 2024 and sell it today you would earn a total of 186.00 from holding Lifestyle Ii Moderate or generate 19.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aqr Managed Futures vs. Lifestyle Ii Moderate
Performance |
| Timeline |
| Aqr Managed Futures |
| Lifestyle Ii Moderate |
Aqr Managed and Lifestyle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aqr Managed and Lifestyle
The main advantage of trading using opposite Aqr Managed and Lifestyle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aqr Managed position performs unexpectedly, Lifestyle 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 Lifestyle will offset losses from the drop in Lifestyle's long position.| Aqr Managed vs. Lifestyle Ii Moderate | Aqr Managed vs. Dimensional Retirement Income | Aqr Managed vs. Transamerica Cleartrack Retirement | Aqr Managed vs. Fidelity Managed Retirement |
| Lifestyle vs. Regional Bank Fund | Lifestyle vs. Regional Bank Fund | Lifestyle vs. Multimanager Lifestyle Moderate | Lifestyle vs. Multimanager Lifestyle Balanced |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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