Correlation Between Jhancock Disciplined and Aqr Large
Can any of the company-specific risk be diversified away by investing in both Jhancock Disciplined 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 Jhancock Disciplined and Aqr Large into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jhancock Disciplined Value and Aqr Large Cap, you can compare the effects of market volatilities on Jhancock Disciplined 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 Jhancock Disciplined with a short position of Aqr Large. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jhancock Disciplined and Aqr Large.
Diversification Opportunities for Jhancock Disciplined and Aqr Large
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Jhancock and AQR is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Jhancock Disciplined Value 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 Jhancock Disciplined 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 Jhancock Disciplined Value 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 Jhancock Disciplined i.e., Jhancock Disciplined and Aqr Large go up and down completely randomly.
Pair Corralation between Jhancock Disciplined and Aqr Large
Assuming the 90 days horizon Jhancock Disciplined Value is expected to generate 1.12 times more return on investment than Aqr Large. However, Jhancock Disciplined is 1.12 times more volatile than Aqr Large Cap. It trades about 0.23 of its potential returns per unit of risk. Aqr Large Cap is currently generating about 0.21 per unit of risk. If you would invest 2,626 in Jhancock Disciplined Value on August 28, 2024 and sell it today you would earn a total of 139.00 from holding Jhancock Disciplined Value or generate 5.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jhancock Disciplined Value vs. Aqr Large Cap
Performance |
| Timeline |
| Jhancock Disciplined |
| Aqr Large Cap |
Jhancock Disciplined and Aqr Large Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jhancock Disciplined and Aqr Large
The main advantage of trading using opposite Jhancock Disciplined and Aqr Large positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jhancock Disciplined 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.The idea behind Jhancock Disciplined Value and Aqr Large Cap pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
| Aqr Large vs. Aqr Large Cap | Aqr Large vs. Aqr Large Cap | Aqr Large vs. Aqr International Defensive | Aqr Large 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
Other Complementary Tools
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance |