Correlation Between Blackrock Alternative and Aqr Style
Can any of the company-specific risk be diversified away by investing in both Blackrock Alternative and Aqr Style 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 Blackrock Alternative and Aqr Style into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Blackrock Alternative Capital and Aqr Style Premia, you can compare the effects of market volatilities on Blackrock Alternative and Aqr Style 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 Blackrock Alternative with a short position of Aqr Style. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blackrock Alternative and Aqr Style.
Diversification Opportunities for Blackrock Alternative and Aqr Style
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Blackrock and Aqr is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Blackrock Alternative Capital and Aqr Style Premia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aqr Style Premia and Blackrock Alternative 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 Blackrock Alternative Capital are associated (or correlated) with Aqr Style. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aqr Style Premia has no effect on the direction of Blackrock Alternative i.e., Blackrock Alternative and Aqr Style go up and down completely randomly.
Pair Corralation between Blackrock Alternative and Aqr Style
Assuming the 90 days horizon Blackrock Alternative Capital is expected to generate 0.37 times more return on investment than Aqr Style. However, Blackrock Alternative Capital is 2.68 times less risky than Aqr Style. It trades about 0.06 of its potential returns per unit of risk. Aqr Style Premia is currently generating about -0.02 per unit of risk. If you would invest 1,058 in Blackrock Alternative Capital on September 2, 2024 and sell it today you would earn a total of 9.00 from holding Blackrock Alternative Capital or generate 0.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Blackrock Alternative Capital vs. Aqr Style Premia
Performance |
| Timeline |
| Blackrock Alternative |
| Aqr Style Premia |
Blackrock Alternative and Aqr Style Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Blackrock Alternative and Aqr Style
The main advantage of trading using opposite Blackrock Alternative and Aqr Style positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Blackrock Alternative position performs unexpectedly, Aqr Style 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 Style will offset losses from the drop in Aqr Style's long position.| Blackrock Alternative vs. Blckrk Lc Cr | Blackrock Alternative vs. Calamos Market Neutral | Blackrock Alternative vs. Pimco Trends Managed | Blackrock Alternative vs. Blackrock Global Long |
| Aqr Style vs. John Hancock Financial | Aqr Style vs. Mesirow Financial Small | Aqr Style vs. Goldman Sachs Financial | Aqr Style vs. Davis Financial 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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