Correlation Between Absolute Convertible and Aqr International
Can any of the company-specific risk be diversified away by investing in both Absolute Convertible and Aqr International 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 Absolute Convertible and Aqr International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Absolute Convertible Arbitrage and Aqr International Defensive, you can compare the effects of market volatilities on Absolute Convertible and Aqr International 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 Absolute Convertible with a short position of Aqr International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Absolute Convertible and Aqr International.
Diversification Opportunities for Absolute Convertible and Aqr International
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Absolute and Aqr is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Absolute Convertible Arbitrage and Aqr International Defensive in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aqr International and Absolute Convertible 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 Absolute Convertible Arbitrage are associated (or correlated) with Aqr International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aqr International has no effect on the direction of Absolute Convertible i.e., Absolute Convertible and Aqr International go up and down completely randomly.
Pair Corralation between Absolute Convertible and Aqr International
Assuming the 90 days horizon Absolute Convertible Arbitrage is expected to generate 0.07 times more return on investment than Aqr International. However, Absolute Convertible Arbitrage is 13.34 times less risky than Aqr International. It trades about 0.58 of its potential returns per unit of risk. Aqr International Defensive is currently generating about 0.03 per unit of risk. If you would invest 1,143 in Absolute Convertible Arbitrage on September 1, 2024 and sell it today you would earn a total of 7.00 from holding Absolute Convertible Arbitrage or generate 0.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Absolute Convertible Arbitrage vs. Aqr International Defensive
Performance |
| Timeline |
| Absolute Convertible |
| Aqr International |
Absolute Convertible and Aqr International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Absolute Convertible and Aqr International
The main advantage of trading using opposite Absolute Convertible and Aqr International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Absolute Convertible position performs unexpectedly, Aqr International 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 International will offset losses from the drop in Aqr International's long position.| Absolute Convertible vs. Amg Managers Centersquare | Absolute Convertible vs. Dunham Real Estate | Absolute Convertible vs. Great West Real Estate | Absolute Convertible vs. Virtus Real Estate |
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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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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