Correlation Between Federated Global and Aqr Global
Can any of the company-specific risk be diversified away by investing in both Federated Global 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 Federated Global and Aqr Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Federated Global Allocation and Aqr Global Macro, you can compare the effects of market volatilities on Federated Global 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 Federated Global with a short position of Aqr Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated Global and Aqr Global.
Diversification Opportunities for Federated Global and Aqr Global
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between FEDERATED and Aqr is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Federated Global Allocation 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 Federated 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 Federated Global Allocation 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 Federated Global i.e., Federated Global and Aqr Global go up and down completely randomly.
Pair Corralation between Federated Global and Aqr Global
Assuming the 90 days horizon Federated Global Allocation is expected to under-perform the Aqr Global. In addition to that, Federated Global is 1.23 times more volatile than Aqr Global Macro. It trades about -0.26 of its total potential returns per unit of risk. Aqr Global Macro is currently generating about 0.07 per unit of volatility. If you would invest 937.00 in Aqr Global Macro on October 11, 2024 and sell it today you would earn a total of 7.00 from holding Aqr Global Macro or generate 0.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Federated Global Allocation vs. Aqr Global Macro
Performance |
| Timeline |
| Federated Global All |
| Aqr Global Macro |
Federated Global and Aqr Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federated Global and Aqr Global
The main advantage of trading using opposite Federated Global and Aqr Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated Global 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.| Federated Global vs. Federated Max Cap Index | Federated Global vs. Federated Kaufmann Fund | Federated Global vs. Federated Strategic Income | Federated Global vs. Federated Bond Fund |
| Aqr Global vs. Victory Rs Partners | Aqr Global vs. Fidelity Small Cap | Aqr Global vs. Small Cap Value Fund | Aqr Global vs. Amg River Road |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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