Correlation Between Aqr Managed and Locorr Market
Can any of the company-specific risk be diversified away by investing in both Aqr Managed and Locorr Market 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 Locorr Market 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 Locorr Market Trend, you can compare the effects of market volatilities on Aqr Managed and Locorr Market 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 Locorr Market. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aqr Managed and Locorr Market.
Diversification Opportunities for Aqr Managed and Locorr Market
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Aqr and Locorr is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Aqr Managed Futures and Locorr Market Trend in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Locorr Market Trend 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 Locorr Market. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Locorr Market Trend has no effect on the direction of Aqr Managed i.e., Aqr Managed and Locorr Market go up and down completely randomly.
Pair Corralation between Aqr Managed and Locorr Market
Assuming the 90 days horizon Aqr Managed Futures is expected to generate 0.87 times more return on investment than Locorr Market. However, Aqr Managed Futures is 1.14 times less risky than Locorr Market. It trades about 0.03 of its potential returns per unit of risk. Locorr Market Trend is currently generating about -0.01 per unit of risk. If you would invest 788.00 in Aqr Managed Futures on September 2, 2024 and sell it today you would earn a total of 71.00 from holding Aqr Managed Futures or generate 9.01% 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. Locorr Market Trend
Performance |
| Timeline |
| Aqr Managed Futures |
| Locorr Market Trend |
Aqr Managed and Locorr Market Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aqr Managed and Locorr Market
The main advantage of trading using opposite Aqr Managed and Locorr Market positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aqr Managed position performs unexpectedly, Locorr Market 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 Locorr Market will offset losses from the drop in Locorr Market's long position.| Aqr Managed vs. Dimensional Retirement Income | Aqr Managed vs. Wisdomtree Siegel Moderate | Aqr Managed vs. Moderately Aggressive Balanced | Aqr Managed vs. Tiaa Cref Lifestyle Moderate |
| Locorr Market vs. Ab Government Exchange | Locorr Market vs. Government Securities Fund | Locorr Market vs. Us Government Securities | Locorr Market vs. Prudential Government Income |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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