Correlation Between Cognios Market and Aqr Long-short
Can any of the company-specific risk be diversified away by investing in both Cognios Market and Aqr Long-short 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 Cognios Market and Aqr Long-short into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cognios Market Neutral and Aqr Long Short Equity, you can compare the effects of market volatilities on Cognios Market and Aqr Long-short 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 Cognios Market with a short position of Aqr Long-short. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cognios Market and Aqr Long-short.
Diversification Opportunities for Cognios Market and Aqr Long-short
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Cognios and Aqr is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Cognios Market Neutral and Aqr Long Short Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aqr Long Short and Cognios Market 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 Cognios Market Neutral are associated (or correlated) with Aqr Long-short. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aqr Long Short has no effect on the direction of Cognios Market i.e., Cognios Market and Aqr Long-short go up and down completely randomly.
Pair Corralation between Cognios Market and Aqr Long-short
Assuming the 90 days horizon Cognios Market Neutral is expected to under-perform the Aqr Long-short. But the mutual fund apears to be less risky and, when comparing its historical volatility, Cognios Market Neutral is 1.82 times less risky than Aqr Long-short. The mutual fund trades about -0.04 of its potential returns per unit of risk. The Aqr Long Short Equity is currently generating about 0.36 of returns per unit of risk over similar time horizon. If you would invest 1,655 in Aqr Long Short Equity on November 27, 2024 and sell it today you would earn a total of 47.00 from holding Aqr Long Short Equity or generate 2.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cognios Market Neutral vs. Aqr Long Short Equity
Performance |
| Timeline |
| Cognios Market Neutral |
| Aqr Long Short |
Cognios Market and Aqr Long-short Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cognios Market and Aqr Long-short
The main advantage of trading using opposite Cognios Market and Aqr Long-short positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cognios Market position performs unexpectedly, Aqr Long-short 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 Long-short will offset losses from the drop in Aqr Long-short's long position.| Cognios Market vs. Virtus Convertible | Cognios Market vs. Calamos Vertible Fund | Cognios Market vs. Franklin Vertible Securities | Cognios Market vs. Putnam Vertible Securities |
| Aqr Long-short vs. T Rowe Price | Aqr Long-short vs. Transamerica Funds | Aqr Long-short vs. First American Funds | Aqr Long-short vs. Doubleline Emerging Markets |
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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