Correlation Between Horizon Active and Aqr Large
Can any of the company-specific risk be diversified away by investing in both Horizon Active and Aqr Large 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 Horizon Active and Aqr Large into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Horizon Active Risk and Aqr Large Cap, you can compare the effects of market volatilities on Horizon Active and Aqr Large 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 Horizon Active with a short position of Aqr Large. Check out your portfolio center. Please also check ongoing floating volatility patterns of Horizon Active and Aqr Large.
Diversification Opportunities for Horizon Active and Aqr Large
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Horizon and Aqr is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Horizon Active Risk and Aqr Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aqr Large Cap and Horizon Active 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 Horizon Active Risk are associated (or correlated) with Aqr Large. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aqr Large Cap has no effect on the direction of Horizon Active i.e., Horizon Active and Aqr Large go up and down completely randomly.
Pair Corralation between Horizon Active and Aqr Large
Assuming the 90 days horizon Horizon Active is expected to generate 5.67 times less return on investment than Aqr Large. But when comparing it to its historical volatility, Horizon Active Risk is 1.53 times less risky than Aqr Large. It trades about 0.07 of its potential returns per unit of risk. Aqr Large Cap is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 2,441 in Aqr Large Cap on August 29, 2024 and sell it today you would earn a total of 141.00 from holding Aqr Large Cap or generate 5.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Horizon Active Risk vs. Aqr Large Cap
Performance |
| Timeline |
| Horizon Active Risk |
| Aqr Large Cap |
Horizon Active and Aqr Large Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Horizon Active and Aqr Large
The main advantage of trading using opposite Horizon Active and Aqr Large positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Horizon Active position performs unexpectedly, Aqr Large 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 Aqr Large will offset losses from the drop in Aqr Large's long position.| Horizon Active vs. Aqr Large Cap | Horizon Active vs. Strategic Allocation Aggressive | Horizon Active vs. Hartford Moderate Allocation | Horizon Active vs. Old Westbury Large |
| Aqr Large vs. Growth Fund Of | Aqr Large vs. HUMANA INC | Aqr Large vs. Aquagold International | Aqr Large vs. Barloworld Ltd ADR |
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 CEOs Directory module to screen CEOs from public companies around the world.
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