Correlation Between Barloworld and Aqr Managed
Can any of the company-specific risk be diversified away by investing in both Barloworld 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 Barloworld and Aqr Managed into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Barloworld Ltd ADR and Aqr Managed Futures, you can compare the effects of market volatilities on Barloworld 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 Barloworld with a short position of Aqr Managed. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barloworld and Aqr Managed.
Diversification Opportunities for Barloworld and Aqr Managed
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Barloworld and Aqr is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Barloworld Ltd ADR 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 Barloworld 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 Barloworld Ltd ADR 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 Barloworld i.e., Barloworld and Aqr Managed go up and down completely randomly.
Pair Corralation between Barloworld and Aqr Managed
Assuming the 90 days horizon Barloworld Ltd ADR is expected to generate 8.44 times more return on investment than Aqr Managed. However, Barloworld is 8.44 times more volatile than Aqr Managed Futures. It trades about 0.04 of its potential returns per unit of risk. Aqr Managed Futures is currently generating about 0.02 per unit of risk. If you would invest 436.00 in Barloworld Ltd ADR on August 29, 2024 and sell it today you would lose (13.00) from holding Barloworld Ltd ADR or give up 2.98% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 71.57% |
| Values | Daily Returns |
Barloworld Ltd ADR vs. Aqr Managed Futures
Performance |
| Timeline |
| Barloworld ADR |
| Aqr Managed Futures |
Barloworld and Aqr Managed Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barloworld and Aqr Managed
The main advantage of trading using opposite Barloworld and Aqr Managed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barloworld 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.| Barloworld vs. Hertz Global Holdings | Barloworld vs. United Rentals | Barloworld vs. Ryder System | Barloworld vs. Herc Holdings |
| Aqr Managed vs. Pimco Trends Managed | Aqr Managed vs. HUMANA INC | Aqr Managed vs. Aquagold International | Aqr Managed vs. Barloworld Ltd ADR |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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