Correlation Between Aqr Risk and Nasdaq 100
Can any of the company-specific risk be diversified away by investing in both Aqr Risk and Nasdaq 100 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 Nasdaq 100 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 Nasdaq 100 Index Fund, you can compare the effects of market volatilities on Aqr Risk and Nasdaq 100 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 Nasdaq 100. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aqr Risk and Nasdaq 100.
Diversification Opportunities for Aqr Risk and Nasdaq 100
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Aqr and Nasdaq is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Aqr Risk Parity and Nasdaq 100 Index Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nasdaq 100 Index 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 Nasdaq 100. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nasdaq 100 Index has no effect on the direction of Aqr Risk i.e., Aqr Risk and Nasdaq 100 go up and down completely randomly.
Pair Corralation between Aqr Risk and Nasdaq 100
Assuming the 90 days horizon Aqr Risk Parity is expected to generate 0.47 times more return on investment than Nasdaq 100. However, Aqr Risk Parity is 2.11 times less risky than Nasdaq 100. It trades about 0.37 of its potential returns per unit of risk. Nasdaq 100 Index Fund is currently generating about 0.09 per unit of risk. If you would invest 1,048 in Aqr Risk Parity on November 3, 2024 and sell it today you would earn a total of 47.00 from holding Aqr Risk Parity or generate 4.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Aqr Risk Parity vs. Nasdaq 100 Index Fund
Performance |
| Timeline |
| Aqr Risk Parity |
| Nasdaq 100 Index |
Aqr Risk and Nasdaq 100 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aqr Risk and Nasdaq 100
The main advantage of trading using opposite Aqr Risk and Nasdaq 100 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aqr Risk position performs unexpectedly, Nasdaq 100 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 Nasdaq 100 will offset losses from the drop in Nasdaq 100's long position.| Aqr Risk vs. Towpath Technology | Aqr Risk vs. Blackrock Science Technology | Aqr Risk vs. Red Oak Technology | Aqr Risk vs. Science Technology Fund |
| Nasdaq 100 vs. Hartford Municipal Short | Nasdaq 100 vs. Oklahoma Municipal Fund | Nasdaq 100 vs. Goldman Sachs Short | Nasdaq 100 vs. California Municipal Portfolio |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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