Correlation Between Federated Mdt and Aqr Large
Can any of the company-specific risk be diversified away by investing in both Federated Mdt and Aqr Large 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 Federated Mdt and Aqr Large into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Federated Mdt Large and Aqr Large Cap, you can compare the effects of market volatilities on Federated Mdt and Aqr Large 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 Federated Mdt with a short position of Aqr Large. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated Mdt and Aqr Large.
Diversification Opportunities for Federated Mdt and Aqr Large
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between FEDERATED and Aqr is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Federated Mdt Large and Aqr Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aqr Large Cap and Federated Mdt 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 Federated Mdt Large are associated (or correlated) with Aqr Large. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aqr Large Cap has no effect on the direction of Federated Mdt i.e., Federated Mdt and Aqr Large go up and down completely randomly.
Pair Corralation between Federated Mdt and Aqr Large
Assuming the 90 days horizon Federated Mdt Large is expected to generate 0.78 times more return on investment than Aqr Large. However, Federated Mdt Large is 1.27 times less risky than Aqr Large. It trades about 0.35 of its potential returns per unit of risk. Aqr Large Cap is currently generating about 0.23 per unit of risk. If you would invest 3,530 in Federated Mdt Large on August 28, 2024 and sell it today you would earn a total of 221.00 from holding Federated Mdt Large or generate 6.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Federated Mdt Large vs. Aqr Large Cap
Performance |
| Timeline |
| Federated Mdt Large |
| Aqr Large Cap |
Federated Mdt and Aqr Large Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federated Mdt and Aqr Large
The main advantage of trading using opposite Federated Mdt and Aqr Large positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated Mdt position performs unexpectedly, Aqr Large 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 Large will offset losses from the drop in Aqr Large's long position.| Federated Mdt vs. Federated Emerging Market | Federated Mdt vs. Federated Mdt All | Federated Mdt vs. Federated Mdt Balanced | Federated Mdt vs. Federated Global Allocation |
| Aqr Large vs. Icon Financial Fund | Aqr Large vs. Mesirow Financial Small | Aqr Large vs. Vanguard Financials Index | Aqr Large vs. Blackrock Financial Institutions |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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