Correlation Between Barings Active and Aqr Equity
Can any of the company-specific risk be diversified away by investing in both Barings Active and Aqr Equity 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 Barings Active and Aqr Equity into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Barings Active Short and Aqr Equity Market, you can compare the effects of market volatilities on Barings Active and Aqr Equity 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 Barings Active with a short position of Aqr Equity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barings Active and Aqr Equity.
Diversification Opportunities for Barings Active and Aqr Equity
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Barings and Aqr is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Barings Active Short and Aqr Equity Market in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aqr Equity Market and Barings Active 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 Barings Active Short are associated (or correlated) with Aqr Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aqr Equity Market has no effect on the direction of Barings Active i.e., Barings Active and Aqr Equity go up and down completely randomly.
Pair Corralation between Barings Active and Aqr Equity
Assuming the 90 days horizon Barings Active is expected to generate 14.91 times less return on investment than Aqr Equity. But when comparing it to its historical volatility, Barings Active Short is 3.88 times less risky than Aqr Equity. It trades about 0.12 of its potential returns per unit of risk. Aqr Equity Market is currently generating about 0.46 of returns per unit of risk over similar time horizon. If you would invest 979.00 in Aqr Equity Market on November 1, 2024 and sell it today you would earn a total of 34.00 from holding Aqr Equity Market or generate 3.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.0% |
| Values | Daily Returns |
Barings Active Short vs. Aqr Equity Market
Performance |
| Timeline |
| Barings Active Short |
| Aqr Equity Market |
Barings Active and Aqr Equity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barings Active and Aqr Equity
The main advantage of trading using opposite Barings Active and Aqr Equity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barings Active position performs unexpectedly, Aqr Equity 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 Equity will offset losses from the drop in Aqr Equity's long position.| Barings Active vs. Barings Active Short | Barings Active vs. Barings Emerging Markets | Barings Active vs. Barings Emerging Markets | Barings Active vs. Barings Global Floating |
| Aqr Equity vs. Barings Active Short | Aqr Equity vs. T Rowe Price | Aqr Equity vs. Credit Suisse Floating | Aqr Equity vs. Rbb Fund |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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