Correlation Between Prudential Emerging and Aqr Global
Can any of the company-specific risk be diversified away by investing in both Prudential Emerging and Aqr Global 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 Prudential Emerging and Aqr Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Prudential Emerging Markets and Aqr Global Macro, you can compare the effects of market volatilities on Prudential Emerging and Aqr Global 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 Prudential Emerging with a short position of Aqr Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prudential Emerging and Aqr Global.
Diversification Opportunities for Prudential Emerging and Aqr Global
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Prudential and Aqr is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Prudential Emerging Markets and Aqr Global Macro in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aqr Global Macro and Prudential Emerging 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 Prudential Emerging Markets are associated (or correlated) with Aqr Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aqr Global Macro has no effect on the direction of Prudential Emerging i.e., Prudential Emerging and Aqr Global go up and down completely randomly.
Pair Corralation between Prudential Emerging and Aqr Global
Assuming the 90 days horizon Prudential Emerging is expected to generate 1.6 times less return on investment than Aqr Global. But when comparing it to its historical volatility, Prudential Emerging Markets is 1.08 times less risky than Aqr Global. It trades about 0.12 of its potential returns per unit of risk. Aqr Global Macro is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 943.00 in Aqr Global Macro on November 7, 2024 and sell it today you would earn a total of 17.00 from holding Aqr Global Macro or generate 1.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Prudential Emerging Markets vs. Aqr Global Macro
Performance |
| Timeline |
| Prudential Emerging |
| Aqr Global Macro |
Prudential Emerging and Aqr Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Prudential Emerging and Aqr Global
The main advantage of trading using opposite Prudential Emerging and Aqr Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Prudential Emerging position performs unexpectedly, Aqr Global 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 Global will offset losses from the drop in Aqr Global's long position.| Prudential Emerging vs. T Rowe Price | Prudential Emerging vs. Rbb Fund | Prudential Emerging vs. Small Pany Growth | Prudential Emerging vs. Qs Large Cap |
| Aqr Global vs. Morningstar Global Income | Aqr Global vs. Franklin Mutual Global | Aqr Global vs. Gamco Global Opportunity | Aqr Global vs. Ab Global Real |
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 Stocks Directory module to find actively traded stocks across global markets.
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