Correlation Between Aqr Risk-balanced and Baillie Gifford
Can any of the company-specific risk be diversified away by investing in both Aqr Risk-balanced and Baillie Gifford 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-balanced and Baillie Gifford into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aqr Risk Balanced Modities and Baillie Gifford China, you can compare the effects of market volatilities on Aqr Risk-balanced and Baillie Gifford 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-balanced with a short position of Baillie Gifford. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aqr Risk-balanced and Baillie Gifford.
Diversification Opportunities for Aqr Risk-balanced and Baillie Gifford
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between AQR and Baillie is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Aqr Risk Balanced Modities and Baillie Gifford China in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baillie Gifford China and Aqr Risk-balanced 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 Balanced Modities are associated (or correlated) with Baillie Gifford. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baillie Gifford China has no effect on the direction of Aqr Risk-balanced i.e., Aqr Risk-balanced and Baillie Gifford go up and down completely randomly.
Pair Corralation between Aqr Risk-balanced and Baillie Gifford
Assuming the 90 days horizon Aqr Risk-balanced is expected to generate 1.78 times less return on investment than Baillie Gifford. But when comparing it to its historical volatility, Aqr Risk Balanced Modities is 1.99 times less risky than Baillie Gifford. It trades about 0.04 of its potential returns per unit of risk. Baillie Gifford China is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 465.00 in Baillie Gifford China on September 2, 2024 and sell it today you would earn a total of 57.00 from holding Baillie Gifford China or generate 12.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aqr Risk Balanced Modities vs. Baillie Gifford China
Performance |
| Timeline |
| Aqr Risk Balanced |
| Baillie Gifford China |
Aqr Risk-balanced and Baillie Gifford Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aqr Risk-balanced and Baillie Gifford
The main advantage of trading using opposite Aqr Risk-balanced and Baillie Gifford positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aqr Risk-balanced position performs unexpectedly, Baillie Gifford 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 Baillie Gifford will offset losses from the drop in Baillie Gifford's long position.| Aqr Risk-balanced vs. Aqr Large Cap | Aqr Risk-balanced vs. Aqr Large Cap | Aqr Risk-balanced vs. Aqr International Defensive | Aqr Risk-balanced vs. Aqr International Defensive |
| Baillie Gifford vs. California High Yield Municipal | Baillie Gifford vs. Aqr Risk Balanced Modities | Baillie Gifford vs. Alliancebernstein Global High | Baillie Gifford vs. Pace High Yield |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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