Correlation Between Federated Max-cap and Aqr Managed
Can any of the company-specific risk be diversified away by investing in both Federated Max-cap 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 Federated Max-cap and Aqr Managed into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Federated Max Cap Index and Aqr Managed Futures, you can compare the effects of market volatilities on Federated Max-cap 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 Federated Max-cap with a short position of Aqr Managed. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated Max-cap and Aqr Managed.
Diversification Opportunities for Federated Max-cap and Aqr Managed
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Federated and AQR is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Federated Max Cap Index 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 Federated Max-cap 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 Federated Max Cap Index 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 Federated Max-cap i.e., Federated Max-cap and Aqr Managed go up and down completely randomly.
Pair Corralation between Federated Max-cap and Aqr Managed
Assuming the 90 days horizon Federated Max Cap Index is expected to generate 1.18 times more return on investment than Aqr Managed. However, Federated Max-cap is 1.18 times more volatile than Aqr Managed Futures. It trades about 0.34 of its potential returns per unit of risk. Aqr Managed Futures is currently generating about 0.17 per unit of risk. If you would invest 767.00 in Federated Max Cap Index on September 3, 2024 and sell it today you would earn a total of 39.00 from holding Federated Max Cap Index or generate 5.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Federated Max Cap Index vs. Aqr Managed Futures
Performance |
| Timeline |
| Federated Max Cap |
| Aqr Managed Futures |
Federated Max-cap and Aqr Managed Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federated Max-cap and Aqr Managed
The main advantage of trading using opposite Federated Max-cap and Aqr Managed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated Max-cap 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.| Federated Max-cap vs. Guidepath Managed Futures | Federated Max-cap vs. Cref Inflation Linked Bond | Federated Max-cap vs. Ab Bond Inflation | Federated Max-cap vs. Aqr Managed Futures |
| Aqr Managed vs. Arrow Managed Futures | Aqr Managed vs. Abr 7525 Volatility | Aqr Managed vs. Sei Daily Income | Aqr Managed vs. Volumetric Fund Volumetric |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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