Correlation Between Mirova Global and Aqr International
Can any of the company-specific risk be diversified away by investing in both Mirova Global 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 Mirova Global and Aqr International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mirova Global Green and Aqr International Defensive, you can compare the effects of market volatilities on Mirova Global 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 Mirova Global with a short position of Aqr International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mirova Global and Aqr International.
Diversification Opportunities for Mirova Global and Aqr International
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Mirova and Aqr is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Mirova Global Green and Aqr International Defensive in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aqr International and Mirova Global 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 Mirova Global Green 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 Mirova Global i.e., Mirova Global and Aqr International go up and down completely randomly.
Pair Corralation between Mirova Global and Aqr International
Assuming the 90 days horizon Mirova Global is expected to generate 2.77 times less return on investment than Aqr International. But when comparing it to its historical volatility, Mirova Global Green is 2.34 times less risky than Aqr International. It trades about 0.17 of its potential returns per unit of risk. Aqr International Defensive is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 1,505 in Aqr International Defensive on November 27, 2024 and sell it today you would earn a total of 39.00 from holding Aqr International Defensive or generate 2.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mirova Global Green vs. Aqr International Defensive
Performance |
| Timeline |
| Mirova Global Green |
| Aqr International |
Mirova Global and Aqr International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mirova Global and Aqr International
The main advantage of trading using opposite Mirova Global and Aqr International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mirova Global 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.| Mirova Global vs. Pro Blend Servative Term | Mirova Global vs. Ms Global Fixed | Mirova Global vs. Gmo Global Equity | Mirova Global vs. Nationwide E Plus |
| Aqr International vs. Dreyfusstandish Global Fixed | Aqr International vs. Tax Managed International Equity | Aqr International vs. Gmo Global Equity | Aqr International vs. Doubleline 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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