Correlation Between Voya Index and Aqr Managed
Can any of the company-specific risk be diversified away by investing in both Voya Index 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 Voya Index and Aqr Managed into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Voya Index Solution and Aqr Managed Futures, you can compare the effects of market volatilities on Voya Index 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 Voya Index with a short position of Aqr Managed. Check out your portfolio center. Please also check ongoing floating volatility patterns of Voya Index and Aqr Managed.
Diversification Opportunities for Voya Index and Aqr Managed
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Voya and AQR is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Voya Index Solution 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 Voya Index 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 Voya Index Solution 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 Voya Index i.e., Voya Index and Aqr Managed go up and down completely randomly.
Pair Corralation between Voya Index and Aqr Managed
Assuming the 90 days horizon Voya Index Solution is expected to generate 0.95 times more return on investment than Aqr Managed. However, Voya Index Solution is 1.06 times less risky than Aqr Managed. It trades about 0.09 of its potential returns per unit of risk. Aqr Managed Futures is currently generating about 0.03 per unit of risk. If you would invest 960.00 in Voya Index Solution on September 4, 2024 and sell it today you would earn a total of 297.00 from holding Voya Index Solution or generate 30.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Voya Index Solution vs. Aqr Managed Futures
Performance |
| Timeline |
| Voya Index Solution |
| Aqr Managed Futures |
Voya Index and Aqr Managed Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Voya Index and Aqr Managed
The main advantage of trading using opposite Voya Index and Aqr Managed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Voya Index 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.| Voya Index vs. Oppenheimer Gold Special | Voya Index vs. Global Gold Fund | Voya Index vs. Great West Goldman Sachs | Voya Index vs. Gold And Precious |
| Aqr Managed vs. Aqr Large Cap | Aqr Managed vs. Aqr Large Cap | Aqr Managed vs. Aqr International Defensive | Aqr Managed vs. Aqr International Defensive |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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