Correlation Between Columbia and Aqr Managed
Can any of the company-specific risk be diversified away by investing in both Columbia and Aqr Managed 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 Columbia and Aqr Managed into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Columbia Government Mortgage and Aqr Managed Futures, you can compare the effects of market volatilities on Columbia and Aqr Managed 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 Columbia with a short position of Aqr Managed. Check out your portfolio center. Please also check ongoing floating volatility patterns of Columbia and Aqr Managed.
Diversification Opportunities for Columbia and Aqr Managed
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Columbia and AQR is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Columbia Government Mortgage and Aqr Managed Futures in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aqr Managed Futures and Columbia 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 Columbia Government Mortgage are associated (or correlated) with Aqr Managed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aqr Managed Futures has no effect on the direction of Columbia i.e., Columbia and Aqr Managed go up and down completely randomly.
Pair Corralation between Columbia and Aqr Managed
Assuming the 90 days horizon Columbia is expected to generate 1.41 times less return on investment than Aqr Managed. But when comparing it to its historical volatility, Columbia Government Mortgage is 1.72 times less risky than Aqr Managed. It trades about 0.03 of its potential returns per unit of risk. Aqr Managed Futures is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 781.00 in Aqr Managed Futures on November 27, 2024 and sell it today you would earn a total of 88.00 from holding Aqr Managed Futures or generate 11.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Columbia Government Mortgage vs. Aqr Managed Futures
Performance |
| Timeline |
| Columbia Government |
| Aqr Managed Futures |
Columbia and Aqr Managed Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Columbia and Aqr Managed
The main advantage of trading using opposite Columbia and Aqr Managed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Columbia position performs unexpectedly, Aqr Managed 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 Managed will offset losses from the drop in Aqr Managed's long position.| Columbia vs. T Rowe Price | Columbia vs. T Rowe Price | Columbia vs. Pro Blend Servative Term | Columbia vs. Ultra Short Fixed Income |
| Aqr Managed vs. Wells Fargo Advantage | Aqr Managed vs. Gold And Precious | Aqr Managed vs. Investment Managers Series | Aqr Managed vs. Global Gold Fund |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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