Correlation Between Aqr Managed and American Beacon
Can any of the company-specific risk be diversified away by investing in both Aqr Managed and American Beacon 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 American Beacon 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 American Beacon Ahl, you can compare the effects of market volatilities on Aqr Managed and American Beacon 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 American Beacon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aqr Managed and American Beacon.
Diversification Opportunities for Aqr Managed and American Beacon
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Aqr and American is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Aqr Managed Futures and American Beacon Ahl in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Beacon Ahl 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 American Beacon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Beacon Ahl has no effect on the direction of Aqr Managed i.e., Aqr Managed and American Beacon go up and down completely randomly.
Pair Corralation between Aqr Managed and American Beacon
Assuming the 90 days horizon Aqr Managed Futures is expected to generate 1.04 times more return on investment than American Beacon. However, Aqr Managed is 1.04 times more volatile than American Beacon Ahl. It trades about 0.03 of its potential returns per unit of risk. American Beacon Ahl is currently generating about -0.04 per unit of risk. If you would invest 783.00 in Aqr Managed Futures on August 27, 2024 and sell it today you would earn a total of 92.00 from holding Aqr Managed Futures or generate 11.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aqr Managed Futures vs. American Beacon Ahl
Performance |
| Timeline |
| Aqr Managed Futures |
| American Beacon Ahl |
Aqr Managed and American Beacon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aqr Managed and American Beacon
The main advantage of trading using opposite Aqr Managed and American Beacon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aqr Managed position performs unexpectedly, American Beacon 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 American Beacon will offset losses from the drop in American Beacon's long position.| Aqr Managed vs. Aqr Large Cap | Aqr Managed vs. Aqr Large Cap | Aqr Managed vs. Aqr International Defensive | Aqr Managed vs. Aqr International Defensive |
| American Beacon vs. American Beacon Ssi | American Beacon vs. American Beacon Bridgeway | American Beacon vs. American Beacon Bridgeway | American Beacon vs. American Beacon Twentyfour |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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