Correlation Between Icon Information and Aqr Large
Can any of the company-specific risk be diversified away by investing in both Icon Information 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 Icon Information and Aqr Large into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Icon Information Technology and Aqr Large Cap, you can compare the effects of market volatilities on Icon Information 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 Icon Information with a short position of Aqr Large. Check out your portfolio center. Please also check ongoing floating volatility patterns of Icon Information and Aqr Large.
Diversification Opportunities for Icon Information and Aqr Large
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Icon and Aqr is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Icon Information Technology 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 Icon Information 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 Icon Information Technology 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 Icon Information i.e., Icon Information and Aqr Large go up and down completely randomly.
Pair Corralation between Icon Information and Aqr Large
Assuming the 90 days horizon Icon Information is expected to generate 3.06 times less return on investment than Aqr Large. But when comparing it to its historical volatility, Icon Information Technology is 1.17 times less risky than Aqr Large. It trades about 0.01 of its potential returns per unit of risk. Aqr Large Cap is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 1,861 in Aqr Large Cap on October 16, 2024 and sell it today you would earn a total of 312.00 from holding Aqr Large Cap or generate 16.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Icon Information Technology vs. Aqr Large Cap
Performance |
| Timeline |
| Icon Information Tec |
| Aqr Large Cap |
Icon Information and Aqr Large Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Icon Information and Aqr Large
The main advantage of trading using opposite Icon Information and Aqr Large positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Icon Information 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.| Icon Information vs. Aqr Long Short Equity | Icon Information vs. T Rowe Price | Icon Information vs. Doubleline Core Fixed | Icon Information vs. Rbc China Equity |
| Aqr Large vs. Hennessy Technology Fund | Aqr Large vs. Mfs Technology Fund | Aqr Large vs. Icon Information Technology | Aqr Large vs. Invesco Technology Fund |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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