Correlation Between Barings Global and Aqr Managed
Can any of the company-specific risk be diversified away by investing in both Barings Global 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 Barings Global and Aqr Managed into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Barings Global Floating and Aqr Managed Futures, you can compare the effects of market volatilities on Barings Global 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 Barings Global with a short position of Aqr Managed. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barings Global and Aqr Managed.
Diversification Opportunities for Barings Global and Aqr Managed
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Barings and Aqr is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Barings Global Floating 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 Barings Global 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 Global Floating 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 Barings Global i.e., Barings Global and Aqr Managed go up and down completely randomly.
Pair Corralation between Barings Global and Aqr Managed
Assuming the 90 days horizon Barings Global Floating is not expected to generate positive returns. However, Barings Global Floating is 15.51 times less risky than Aqr Managed. It waists most of its returns potential to compensate for thr risk taken. Aqr Managed is generating about 0.04 per unit of risk. If you would invest 837.00 in Aqr Managed Futures on November 7, 2024 and sell it today you would earn a total of 5.00 from holding Aqr Managed Futures or generate 0.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Barings Global Floating vs. Aqr Managed Futures
Performance |
| Timeline |
| Barings Global Floating |
| Aqr Managed Futures |
Barings Global and Aqr Managed Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barings Global and Aqr Managed
The main advantage of trading using opposite Barings Global and Aqr Managed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barings Global 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.| Barings Global vs. Voya Government Money | Barings Global vs. Great West Government Mortgage | Barings Global vs. Hsbc Government Money | Barings Global vs. Virtus Seix Government |
| 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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