Correlation Between Bbh Intermediate and Aqr Global
Can any of the company-specific risk be diversified away by investing in both Bbh Intermediate and Aqr Global 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 Bbh Intermediate and Aqr Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bbh Intermediate Municipal and Aqr Global Equity, you can compare the effects of market volatilities on Bbh Intermediate and Aqr Global 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 Bbh Intermediate with a short position of Aqr Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bbh Intermediate and Aqr Global.
Diversification Opportunities for Bbh Intermediate and Aqr Global
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bbh and Aqr is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Bbh Intermediate Municipal and Aqr Global Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aqr Global Equity and Bbh Intermediate 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 Bbh Intermediate Municipal are associated (or correlated) with Aqr Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aqr Global Equity has no effect on the direction of Bbh Intermediate i.e., Bbh Intermediate and Aqr Global go up and down completely randomly.
Pair Corralation between Bbh Intermediate and Aqr Global
Assuming the 90 days horizon Bbh Intermediate is expected to generate 17.57 times less return on investment than Aqr Global. But when comparing it to its historical volatility, Bbh Intermediate Municipal is 3.76 times less risky than Aqr Global. It trades about 0.04 of its potential returns per unit of risk. Aqr Global Equity is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 1,095 in Aqr Global Equity on September 2, 2024 and sell it today you would earn a total of 97.00 from holding Aqr Global Equity or generate 8.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bbh Intermediate Municipal vs. Aqr Global Equity
Performance |
| Timeline |
| Bbh Intermediate Mun |
| Aqr Global Equity |
Bbh Intermediate and Aqr Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bbh Intermediate and Aqr Global
The main advantage of trading using opposite Bbh Intermediate and Aqr Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bbh Intermediate position performs unexpectedly, Aqr Global 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 Global will offset losses from the drop in Aqr Global's long position.The idea behind Bbh Intermediate Municipal and Aqr Global Equity pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
| Aqr Global vs. Aqr Large Cap | Aqr Global vs. Aqr Large Cap | Aqr Global vs. Aqr International Defensive | Aqr Global vs. Aqr International Defensive |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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