Correlation Between Catalystmillburn and Aqr International
Can any of the company-specific risk be diversified away by investing in both Catalystmillburn and Aqr International 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 Catalystmillburn and Aqr International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Catalystmillburn Hedge Strategy and Aqr International Defensive, you can compare the effects of market volatilities on Catalystmillburn and Aqr International 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 Catalystmillburn with a short position of Aqr International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Catalystmillburn and Aqr International.
Diversification Opportunities for Catalystmillburn and Aqr International
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Catalystmillburn and Aqr is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Catalystmillburn Hedge Strateg and Aqr International Defensive in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aqr International and Catalystmillburn 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 Catalystmillburn Hedge Strategy are associated (or correlated) with Aqr International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aqr International has no effect on the direction of Catalystmillburn i.e., Catalystmillburn and Aqr International go up and down completely randomly.
Pair Corralation between Catalystmillburn and Aqr International
Assuming the 90 days horizon Catalystmillburn is expected to generate 7.16 times less return on investment than Aqr International. But when comparing it to its historical volatility, Catalystmillburn Hedge Strategy is 1.08 times less risky than Aqr International. It trades about 0.04 of its potential returns per unit of risk. Aqr International Defensive is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 1,398 in Aqr International Defensive on November 4, 2024 and sell it today you would earn a total of 47.00 from holding Aqr International Defensive or generate 3.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Catalystmillburn Hedge Strateg vs. Aqr International Defensive
Performance |
| Timeline |
| Catalystmillburn Hedge |
| Aqr International |
Catalystmillburn and Aqr International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Catalystmillburn and Aqr International
The main advantage of trading using opposite Catalystmillburn and Aqr International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Catalystmillburn position performs unexpectedly, Aqr International 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 International will offset losses from the drop in Aqr International's long position.| Catalystmillburn vs. Tfa Alphagen Growth | Catalystmillburn vs. Glg Intl Small | Catalystmillburn vs. Qs Large Cap | Catalystmillburn vs. Versatile Bond Portfolio |
| Aqr International vs. Federated Emerging Market | Aqr International vs. Doubleline Emerging Markets | Aqr International vs. Mid Cap 15x Strategy | Aqr International vs. Siit Emerging Markets |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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