Correlation Between Aqr Managed and Aqr Equity
Can any of the company-specific risk be diversified away by investing in both Aqr Managed and Aqr Equity 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 Aqr Equity 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 Aqr Equity Market, you can compare the effects of market volatilities on Aqr Managed and Aqr Equity 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 Aqr Equity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aqr Managed and Aqr Equity.
Diversification Opportunities for Aqr Managed and Aqr Equity
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Aqr and Aqr is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Aqr Managed Futures and Aqr Equity Market in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aqr Equity Market 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 Aqr Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aqr Equity Market has no effect on the direction of Aqr Managed i.e., Aqr Managed and Aqr Equity go up and down completely randomly.
Pair Corralation between Aqr Managed and Aqr Equity
Assuming the 90 days horizon Aqr Managed Futures is expected to generate 1.93 times more return on investment than Aqr Equity. However, Aqr Managed is 1.93 times more volatile than Aqr Equity Market. It trades about 0.33 of its potential returns per unit of risk. Aqr Equity Market is currently generating about 0.45 per unit of risk. If you would invest 828.00 in Aqr Managed Futures on November 27, 2024 and sell it today you would earn a total of 35.00 from holding Aqr Managed Futures or generate 4.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aqr Managed Futures vs. Aqr Equity Market
Performance |
| Timeline |
| Aqr Managed Futures |
| Aqr Equity Market |
Aqr Managed and Aqr Equity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aqr Managed and Aqr Equity
The main advantage of trading using opposite Aqr Managed and Aqr Equity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aqr Managed position performs unexpectedly, Aqr Equity 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 Aqr Equity will offset losses from the drop in Aqr Equity's long position.| Aqr Managed vs. The Hartford World | Aqr Managed vs. Rbc Impact Bond | Aqr Managed vs. T Rowe Price | Aqr Managed vs. T Rowe Price |
| Aqr Equity vs. Madison Diversified Income | Aqr Equity vs. Diversified Bond Fund | Aqr Equity vs. Harbor Diversified International | Aqr Equity vs. Principal Lifetime Hybrid |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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