Correlation Between Aqr Managed and Guidemark(r) Small/mid
Can any of the company-specific risk be diversified away by investing in both Aqr Managed and Guidemark(r) Small/mid 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 Guidemark(r) Small/mid 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 Guidemark Smallmid Cap, you can compare the effects of market volatilities on Aqr Managed and Guidemark(r) Small/mid 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 Guidemark(r) Small/mid. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aqr Managed and Guidemark(r) Small/mid.
Diversification Opportunities for Aqr Managed and Guidemark(r) Small/mid
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between AQR and Guidemark(r) is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Aqr Managed Futures and Guidemark Smallmid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guidemark Smallmid Cap 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 Guidemark(r) Small/mid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guidemark Smallmid Cap has no effect on the direction of Aqr Managed i.e., Aqr Managed and Guidemark(r) Small/mid go up and down completely randomly.
Pair Corralation between Aqr Managed and Guidemark(r) Small/mid
Assuming the 90 days horizon Aqr Managed Futures is expected to generate 0.36 times more return on investment than Guidemark(r) Small/mid. However, Aqr Managed Futures is 2.76 times less risky than Guidemark(r) Small/mid. It trades about 0.05 of its potential returns per unit of risk. Guidemark Smallmid Cap is currently generating about -0.02 per unit of risk. If you would invest 825.00 in Aqr Managed Futures on October 24, 2024 and sell it today you would earn a total of 16.00 from holding Aqr Managed Futures or generate 1.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aqr Managed Futures vs. Guidemark Smallmid Cap
Performance |
| Timeline |
| Aqr Managed Futures |
| Guidemark Smallmid Cap |
Aqr Managed and Guidemark(r) Small/mid Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aqr Managed and Guidemark(r) Small/mid
The main advantage of trading using opposite Aqr Managed and Guidemark(r) Small/mid positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aqr Managed position performs unexpectedly, Guidemark(r) Small/mid 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 Guidemark(r) Small/mid will offset losses from the drop in Guidemark(r) Small/mid's long position.| Aqr Managed vs. T Rowe Price | Aqr Managed vs. Semiconductor Ultrasector Profund | Aqr Managed vs. Rational Strategic Allocation | Aqr Managed vs. Transamerica Asset Allocation |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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