Correlation Between Inflation Protected and Aqr Managed
Can any of the company-specific risk be diversified away by investing in both Inflation Protected and Aqr Managed 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 Inflation Protected and Aqr Managed into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Inflation Protected Bond Fund and Aqr Managed Futures, you can compare the effects of market volatilities on Inflation Protected and Aqr Managed 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 Inflation Protected with a short position of Aqr Managed. Check out your portfolio center. Please also check ongoing floating volatility patterns of Inflation Protected and Aqr Managed.
Diversification Opportunities for Inflation Protected and Aqr Managed
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Inflation and Aqr is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Inflation Protected Bond Fund and Aqr Managed Futures in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aqr Managed Futures and Inflation Protected 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 Inflation Protected Bond Fund are associated (or correlated) with Aqr Managed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aqr Managed Futures has no effect on the direction of Inflation Protected i.e., Inflation Protected and Aqr Managed go up and down completely randomly.
Pair Corralation between Inflation Protected and Aqr Managed
Assuming the 90 days horizon Inflation Protected Bond Fund is expected to generate 0.68 times more return on investment than Aqr Managed. However, Inflation Protected Bond Fund is 1.48 times less risky than Aqr Managed. It trades about 0.06 of its potential returns per unit of risk. Aqr Managed Futures is currently generating about 0.04 per unit of risk. If you would invest 904.00 in Inflation Protected Bond Fund on November 8, 2024 and sell it today you would earn a total of 118.00 from holding Inflation Protected Bond Fund or generate 13.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Inflation Protected Bond Fund vs. Aqr Managed Futures
Performance |
| Timeline |
| Inflation Protected |
| Aqr Managed Futures |
Inflation Protected and Aqr Managed Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Inflation Protected and Aqr Managed
The main advantage of trading using opposite Inflation Protected and Aqr Managed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Inflation Protected position performs unexpectedly, Aqr Managed 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 Managed will offset losses from the drop in Aqr Managed's long position.| Inflation Protected vs. Short Oil Gas | Inflation Protected vs. Gamco Natural Resources | Inflation Protected vs. Hennessy Bp Energy | Inflation Protected vs. Adams Natural Resources |
| Aqr Managed vs. Baillie Gifford Health | Aqr Managed vs. Vanguard Health Care | Aqr Managed vs. Lord Abbett Health | Aqr Managed vs. Allianzgi Health Sciences |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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