Correlation Between Heartland Value and Aqr Global
Can any of the company-specific risk be diversified away by investing in both Heartland Value 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 Heartland Value and Aqr Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Heartland Value Plus and Aqr Global Macro, you can compare the effects of market volatilities on Heartland Value 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 Heartland Value with a short position of Aqr Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Heartland Value and Aqr Global.
Diversification Opportunities for Heartland Value and Aqr Global
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Heartland and Aqr is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Heartland Value Plus 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 Heartland Value 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 Heartland Value Plus 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 Heartland Value i.e., Heartland Value and Aqr Global go up and down completely randomly.
Pair Corralation between Heartland Value and Aqr Global
Assuming the 90 days horizon Heartland Value Plus is expected to generate 1.89 times more return on investment than Aqr Global. However, Heartland Value is 1.89 times more volatile than Aqr Global Macro. It trades about 0.19 of its potential returns per unit of risk. Aqr Global Macro is currently generating about 0.09 per unit of risk. If you would invest 3,548 in Heartland Value Plus on November 3, 2024 and sell it today you would earn a total of 135.00 from holding Heartland Value Plus or generate 3.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Heartland Value Plus vs. Aqr Global Macro
Performance |
| Timeline |
| Heartland Value Plus |
| Aqr Global Macro |
Heartland Value and Aqr Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Heartland Value and Aqr Global
The main advantage of trading using opposite Heartland Value and Aqr Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Heartland Value 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.| Heartland Value vs. Heartland Value Fund | Heartland Value vs. Large Cap Fund | Heartland Value vs. Amg Yacktman Fund | Heartland Value vs. Wasatch Large Cap |
| Aqr Global vs. Catalystmillburn Hedge Strategy | Aqr Global vs. Catalystmillburn Hedge Strategy | Aqr Global vs. Catalystmillburn Hedge Strategy | Aqr Global vs. Catalystmillburn Hedge Strategy |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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