Correlation Between Sterling Capital and Aqr Long-short
Can any of the company-specific risk be diversified away by investing in both Sterling Capital and Aqr Long-short 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 Sterling Capital and Aqr Long-short into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sterling Capital Short and Aqr Long Short Equity, you can compare the effects of market volatilities on Sterling Capital and Aqr Long-short 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 Sterling Capital with a short position of Aqr Long-short. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sterling Capital and Aqr Long-short.
Diversification Opportunities for Sterling Capital and Aqr Long-short
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between STERLING and Aqr is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Sterling Capital Short and Aqr Long Short Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aqr Long Short and Sterling Capital 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 Sterling Capital Short are associated (or correlated) with Aqr Long-short. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aqr Long Short has no effect on the direction of Sterling Capital i.e., Sterling Capital and Aqr Long-short go up and down completely randomly.
Pair Corralation between Sterling Capital and Aqr Long-short
Assuming the 90 days horizon Sterling Capital is expected to generate 4.93 times less return on investment than Aqr Long-short. But when comparing it to its historical volatility, Sterling Capital Short is 3.58 times less risky than Aqr Long-short. It trades about 0.15 of its potential returns per unit of risk. Aqr Long Short Equity is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 1,305 in Aqr Long Short Equity on September 2, 2024 and sell it today you would earn a total of 345.00 from holding Aqr Long Short Equity or generate 26.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sterling Capital Short vs. Aqr Long Short Equity
Performance |
| Timeline |
| Sterling Capital Short |
| Aqr Long Short |
Sterling Capital and Aqr Long-short Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sterling Capital and Aqr Long-short
The main advantage of trading using opposite Sterling Capital and Aqr Long-short positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sterling Capital position performs unexpectedly, Aqr Long-short 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 Long-short will offset losses from the drop in Aqr Long-short's long position.| Sterling Capital vs. Sterling Capital Equity | Sterling Capital vs. Sterling Capital Behavioral | Sterling Capital vs. Sterling Capital South | Sterling Capital vs. Sterling Capital South |
| Aqr Long-short vs. Pgim Conservative Retirement | Aqr Long-short vs. Prudential Core Conservative | Aqr Long-short vs. Jhancock Diversified Macro | Aqr Long-short vs. Harbor Diversified International |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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