Correlation Between Aqr Managed and Global Technology
Can any of the company-specific risk be diversified away by investing in both Aqr Managed and Global Technology 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 Global Technology 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 Global Technology Portfolio, you can compare the effects of market volatilities on Aqr Managed and Global Technology 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 Global Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aqr Managed and Global Technology.
Diversification Opportunities for Aqr Managed and Global Technology
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Aqr and Global is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Aqr Managed Futures and Global Technology Portfolio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Technology 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 Global Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Technology has no effect on the direction of Aqr Managed i.e., Aqr Managed and Global Technology go up and down completely randomly.
Pair Corralation between Aqr Managed and Global Technology
Assuming the 90 days horizon Aqr Managed Futures is expected to generate 0.67 times more return on investment than Global Technology. However, Aqr Managed Futures is 1.48 times less risky than Global Technology. It trades about 0.3 of its potential returns per unit of risk. Global Technology Portfolio is currently generating about -0.09 per unit of risk. If you would invest 846.00 in Aqr Managed Futures on November 29, 2024 and sell it today you would earn a total of 35.00 from holding Aqr Managed Futures or generate 4.14% 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. Global Technology Portfolio
Performance |
| Timeline |
| Aqr Managed Futures |
| Global Technology |
Aqr Managed and Global Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aqr Managed and Global Technology
The main advantage of trading using opposite Aqr Managed and Global Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aqr Managed position performs unexpectedly, Global Technology 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 Global Technology will offset losses from the drop in Global Technology's long position.| Aqr Managed vs. Lord Abbett Health | Aqr Managed vs. Alphacentric Lifesci Healthcare | Aqr Managed vs. Blackrock Health Sciences | Aqr Managed vs. Health Care Ultrasector |
| Global Technology vs. T Rowe Price | Global Technology vs. Blackrock Global Longshort | Global Technology vs. Delaware Investments Ultrashort | Global Technology vs. Alpine Ultra Short |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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