Correlation Between Mutual Of and Aqr Small
Can any of the company-specific risk be diversified away by investing in both Mutual Of and Aqr Small 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 Mutual Of and Aqr Small into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mutual Of America and Aqr Small Cap, you can compare the effects of market volatilities on Mutual Of and Aqr Small 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 Mutual Of with a short position of Aqr Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mutual Of and Aqr Small.
Diversification Opportunities for Mutual Of and Aqr Small
No risk reduction
The 3 months correlation between Mutual and Aqr is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Mutual Of America and Aqr Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aqr Small Cap and Mutual Of 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 Mutual Of America are associated (or correlated) with Aqr Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aqr Small Cap has no effect on the direction of Mutual Of i.e., Mutual Of and Aqr Small go up and down completely randomly.
Pair Corralation between Mutual Of and Aqr Small
Assuming the 90 days horizon Mutual Of is expected to generate 1.32 times less return on investment than Aqr Small. But when comparing it to its historical volatility, Mutual Of America is 1.27 times less risky than Aqr Small. It trades about 0.06 of its potential returns per unit of risk. Aqr Small Cap is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 1,542 in Aqr Small Cap on September 12, 2024 and sell it today you would earn a total of 521.00 from holding Aqr Small Cap or generate 33.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mutual Of America vs. Aqr Small Cap
Performance |
| Timeline |
| Mutual Of America |
| Aqr Small Cap |
Mutual Of and Aqr Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mutual Of and Aqr Small
The main advantage of trading using opposite Mutual Of and Aqr Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mutual Of position performs unexpectedly, Aqr Small 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 Small will offset losses from the drop in Aqr Small's long position.| Mutual Of vs. Blackrock Inflation Protected | Mutual Of vs. American Funds Inflation | Mutual Of vs. Atac Inflation Rotation | Mutual Of vs. Ab Bond Inflation |
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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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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