Correlation Between Boston Partners and Aqr Style
Can any of the company-specific risk be diversified away by investing in both Boston Partners 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 Boston Partners and Aqr Style into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Boston Partners Small and Aqr Style Premia, you can compare the effects of market volatilities on Boston Partners 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 Boston Partners with a short position of Aqr Style. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boston Partners and Aqr Style.
Diversification Opportunities for Boston Partners and Aqr Style
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Boston and Aqr is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Boston Partners Small 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 Boston Partners 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 Boston Partners Small 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 Boston Partners i.e., Boston Partners and Aqr Style go up and down completely randomly.
Pair Corralation between Boston Partners and Aqr Style
Assuming the 90 days horizon Boston Partners Small is expected to under-perform the Aqr Style. In addition to that, Boston Partners is 1.16 times more volatile than Aqr Style Premia. It trades about -0.04 of its total potential returns per unit of risk. Aqr Style Premia is currently generating about -0.05 per unit of volatility. If you would invest 814.00 in Aqr Style Premia on September 12, 2024 and sell it today you would lose (6.00) from holding Aqr Style Premia or give up 0.74% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Boston Partners Small vs. Aqr Style Premia
Performance |
| Timeline |
| Boston Partners Small |
| Aqr Style Premia |
Boston Partners and Aqr Style Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Boston Partners and Aqr Style
The main advantage of trading using opposite Boston Partners and Aqr Style positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boston Partners 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.| Boston Partners vs. Aggressive Investors 1 | Boston Partners vs. Buffalo Small Cap | Boston Partners vs. Rice Hall James | Boston Partners vs. Putnam Small Cap |
| Aqr Style vs. Pnc Emerging Markets | Aqr Style vs. Eagle Mlp Strategy | Aqr Style vs. Shelton Emerging Markets | Aqr Style vs. Pace International Emerging |
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 CEOs Directory module to screen CEOs from public companies around the world.
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