Correlation Between Aqr Risk-balanced and First Eagle
Can any of the company-specific risk be diversified away by investing in both Aqr Risk-balanced and First Eagle 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 First Eagle 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 First Eagle Fund, you can compare the effects of market volatilities on Aqr Risk-balanced and First Eagle 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 First Eagle. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aqr Risk-balanced and First Eagle.
Diversification Opportunities for Aqr Risk-balanced and First Eagle
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between AQR and First is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Aqr Risk Balanced Modities and First Eagle Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Eagle Fund 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 First Eagle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Eagle Fund has no effect on the direction of Aqr Risk-balanced i.e., Aqr Risk-balanced and First Eagle go up and down completely randomly.
Pair Corralation between Aqr Risk-balanced and First Eagle
Assuming the 90 days horizon Aqr Risk Balanced Modities is expected to under-perform the First Eagle. In addition to that, Aqr Risk-balanced is 1.43 times more volatile than First Eagle Fund. It trades about -0.02 of its total potential returns per unit of risk. First Eagle Fund is currently generating about 0.17 per unit of volatility. If you would invest 2,623 in First Eagle Fund on September 1, 2024 and sell it today you would earn a total of 352.00 from holding First Eagle Fund or generate 13.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.21% |
| Values | Daily Returns |
Aqr Risk Balanced Modities vs. First Eagle Fund
Performance |
| Timeline |
| Aqr Risk Balanced |
| First Eagle Fund |
Aqr Risk-balanced and First Eagle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aqr Risk-balanced and First Eagle
The main advantage of trading using opposite Aqr Risk-balanced and First Eagle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aqr Risk-balanced position performs unexpectedly, First Eagle 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 First Eagle will offset losses from the drop in First Eagle'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 |
| First Eagle vs. Siit High Yield | First Eagle vs. Franklin High Income | First Eagle vs. Strategic Allocation Aggressive | First Eagle vs. Aqr Risk Balanced Modities |
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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