Correlation Between Aqr Risk and Global Gold
Can any of the company-specific risk be diversified away by investing in both Aqr Risk and Global Gold 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 Risk and Global Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aqr Risk Parity and Global Gold Fund, you can compare the effects of market volatilities on Aqr Risk and Global Gold 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 Risk with a short position of Global Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aqr Risk and Global Gold.
Diversification Opportunities for Aqr Risk and Global Gold
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Aqr and Global is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Aqr Risk Parity and Global Gold Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Gold Fund and Aqr Risk 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 Risk Parity are associated (or correlated) with Global Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Gold Fund has no effect on the direction of Aqr Risk i.e., Aqr Risk and Global Gold go up and down completely randomly.
Pair Corralation between Aqr Risk and Global Gold
Assuming the 90 days horizon Aqr Risk is expected to generate 2.63 times less return on investment than Global Gold. But when comparing it to its historical volatility, Aqr Risk Parity is 2.38 times less risky than Global Gold. It trades about 0.38 of its potential returns per unit of risk. Global Gold Fund is currently generating about 0.42 of returns per unit of risk over similar time horizon. If you would invest 1,180 in Global Gold Fund on October 28, 2024 and sell it today you would earn a total of 131.00 from holding Global Gold Fund or generate 11.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aqr Risk Parity vs. Global Gold Fund
Performance |
| Timeline |
| Aqr Risk Parity |
| Global Gold Fund |
Aqr Risk and Global Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aqr Risk and Global Gold
The main advantage of trading using opposite Aqr Risk and Global Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aqr Risk position performs unexpectedly, Global Gold 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 Gold will offset losses from the drop in Global Gold's long position.| Aqr Risk vs. Dunham High Yield | Aqr Risk vs. Buffalo High Yield | Aqr Risk vs. Jpmorgan High Yield | Aqr Risk vs. Voya High Yield |
| Global Gold vs. Vela Short Duration | Global Gold vs. Oakhurst Short Duration | Global Gold vs. Federated Government Ultrashort | Global Gold vs. Aamhimco Short Duration |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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