Correlation Between Baillie Gifford and Aqr Managed
Can any of the company-specific risk be diversified away by investing in both Baillie Gifford 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 Baillie Gifford and Aqr Managed into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Baillie Gifford China and Aqr Managed Futures, you can compare the effects of market volatilities on Baillie Gifford 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 Baillie Gifford with a short position of Aqr Managed. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baillie Gifford and Aqr Managed.
Diversification Opportunities for Baillie Gifford and Aqr Managed
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Baillie and AQR is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Baillie Gifford China 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 Baillie Gifford 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 Baillie Gifford China 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 Baillie Gifford i.e., Baillie Gifford and Aqr Managed go up and down completely randomly.
Pair Corralation between Baillie Gifford and Aqr Managed
Assuming the 90 days horizon Baillie Gifford China is expected to under-perform the Aqr Managed. In addition to that, Baillie Gifford is 1.58 times more volatile than Aqr Managed Futures. It trades about -0.03 of its total potential returns per unit of risk. Aqr Managed Futures is currently generating about 0.02 per unit of volatility. If you would invest 755.00 in Aqr Managed Futures on September 2, 2024 and sell it today you would earn a total of 62.00 from holding Aqr Managed Futures or generate 8.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Baillie Gifford China vs. Aqr Managed Futures
Performance |
| Timeline |
| Baillie Gifford China |
| Aqr Managed Futures |
Baillie Gifford and Aqr Managed Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baillie Gifford and Aqr Managed
The main advantage of trading using opposite Baillie Gifford and Aqr Managed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baillie Gifford 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.| Baillie Gifford vs. Blackrock Inflation Protected | Baillie Gifford vs. Ab Bond Inflation | Baillie Gifford vs. Lord Abbett Inflation | Baillie Gifford vs. Cref Inflation Linked Bond |
| Aqr Managed vs. Aqr Large Cap | Aqr Managed vs. Aqr Large Cap | Aqr Managed vs. Aqr International Defensive | Aqr Managed 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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