Correlation Between Income Fund and Aqr Managed
Can any of the company-specific risk be diversified away by investing in both Income Fund 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 Income Fund and Aqr Managed into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Income Fund Of and Aqr Managed Futures, you can compare the effects of market volatilities on Income Fund 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 Income Fund with a short position of Aqr Managed. Check out your portfolio center. Please also check ongoing floating volatility patterns of Income Fund and Aqr Managed.
Diversification Opportunities for Income Fund and Aqr Managed
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Income and AQR is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Income Fund Of 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 Income Fund 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 Income Fund Of 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 Income Fund i.e., Income Fund and Aqr Managed go up and down completely randomly.
Pair Corralation between Income Fund and Aqr Managed
Assuming the 90 days horizon Income Fund is expected to generate 1.37 times less return on investment than Aqr Managed. But when comparing it to its historical volatility, Income Fund Of is 2.08 times less risky than Aqr Managed. It trades about 0.25 of its potential returns per unit of risk. Aqr Managed Futures is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 790.00 in Aqr Managed Futures on September 1, 2024 and sell it today you would earn a total of 23.00 from holding Aqr Managed Futures or generate 2.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Income Fund Of vs. Aqr Managed Futures
Performance |
| Timeline |
| Income Fund |
| Aqr Managed Futures |
Income Fund and Aqr Managed Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Income Fund and Aqr Managed
The main advantage of trading using opposite Income Fund and Aqr Managed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Income Fund 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.| Income Fund vs. Income Fund Of | Income Fund vs. New World Fund | Income Fund vs. American Mutual Fund | Income Fund vs. American Mutual Fund |
| 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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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