Correlation Between Growth Fund and Aqr Large
Can any of the company-specific risk be diversified away by investing in both Growth Fund 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 Growth Fund and Aqr Large into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Growth Fund Of and Aqr Large Cap, you can compare the effects of market volatilities on Growth Fund 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 Growth Fund with a short position of Aqr Large. Check out your portfolio center. Please also check ongoing floating volatility patterns of Growth Fund and Aqr Large.
Diversification Opportunities for Growth Fund and Aqr Large
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Growth and Aqr is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Growth Fund Of 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 Growth 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 Growth Fund Of 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 Growth Fund i.e., Growth Fund and Aqr Large go up and down completely randomly.
Pair Corralation between Growth Fund and Aqr Large
Assuming the 90 days horizon Growth Fund Of is expected to generate 0.84 times more return on investment than Aqr Large. However, Growth Fund Of is 1.18 times less risky than Aqr Large. It trades about 0.12 of its potential returns per unit of risk. Aqr Large Cap is currently generating about 0.09 per unit of risk. If you would invest 5,945 in Growth Fund Of on September 1, 2024 and sell it today you would earn a total of 2,231 from holding Growth Fund Of or generate 37.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Growth Fund Of vs. Aqr Large Cap
Performance |
| Timeline |
| Growth Fund |
| Aqr Large Cap |
Growth Fund and Aqr Large Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Growth Fund and Aqr Large
The main advantage of trading using opposite Growth Fund and Aqr Large positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Growth Fund 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.| Growth Fund vs. Europacific Growth Fund | Growth Fund vs. Capital World Growth | Growth Fund vs. American Funds Fundamental | Growth Fund vs. Washington Mutual Investors |
| Aqr Large vs. Aqr Large Cap | Aqr Large vs. Aqr International Defensive | Aqr Large vs. Aqr International Defensive | Aqr Large vs. Aqr Long Short Equity |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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