Correlation Between Aqr Small and Ab High
Can any of the company-specific risk be diversified away by investing in both Aqr Small and Ab High 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 Small and Ab High into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aqr Small Cap and Ab High Income, you can compare the effects of market volatilities on Aqr Small and Ab High 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 Small with a short position of Ab High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aqr Small and Ab High.
Diversification Opportunities for Aqr Small and Ab High
Poor diversification
The 3 months correlation between Aqr and AGDAX is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Aqr Small Cap and Ab High Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ab High Income and Aqr Small 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 Small Cap are associated (or correlated) with Ab High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ab High Income has no effect on the direction of Aqr Small i.e., Aqr Small and Ab High go up and down completely randomly.
Pair Corralation between Aqr Small and Ab High
Assuming the 90 days horizon Aqr Small Cap is expected to generate 6.13 times more return on investment than Ab High. However, Aqr Small is 6.13 times more volatile than Ab High Income. It trades about 0.09 of its potential returns per unit of risk. Ab High Income is currently generating about 0.2 per unit of risk. If you would invest 1,852 in Aqr Small Cap on September 4, 2024 and sell it today you would earn a total of 658.00 from holding Aqr Small Cap or generate 35.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Aqr Small Cap vs. Ab High Income
Performance |
| Timeline |
| Aqr Small Cap |
| Ab High Income |
Aqr Small and Ab High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aqr Small and Ab High
The main advantage of trading using opposite Aqr Small and Ab High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aqr Small position performs unexpectedly, Ab High 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 Ab High will offset losses from the drop in Ab High's long position.| Aqr Small vs. Alger Health Sciences | Aqr Small vs. Eventide Healthcare Life | Aqr Small vs. Baron Health Care | Aqr Small vs. Invesco Global Health |
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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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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