Correlation Between NYSE Composite and Aqr Managed
Can any of the company-specific risk be diversified away by investing in both NYSE Composite 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 NYSE Composite and Aqr Managed into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Aqr Managed Futures, you can compare the effects of market volatilities on NYSE Composite 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 NYSE Composite with a short position of Aqr Managed. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Aqr Managed.
Diversification Opportunities for NYSE Composite and Aqr Managed
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between NYSE and Aqr is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite 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 NYSE Composite 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 NYSE Composite 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 NYSE Composite i.e., NYSE Composite and Aqr Managed go up and down completely randomly.
Pair Corralation between NYSE Composite and Aqr Managed
Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.71 times more return on investment than Aqr Managed. However, NYSE Composite is 1.42 times less risky than Aqr Managed. It trades about 0.23 of its potential returns per unit of risk. Aqr Managed Futures is currently generating about 0.09 per unit of risk. If you would invest 1,954,967 in NYSE Composite on August 29, 2024 and sell it today you would earn a total of 66,978 from holding NYSE Composite or generate 3.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Aqr Managed Futures
Performance |
| Timeline |
NYSE Composite and Aqr Managed Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Aqr Managed Futures
Pair trading matchups for Aqr Managed
Pair Trading with NYSE Composite and Aqr Managed
The main advantage of trading using opposite NYSE Composite and Aqr Managed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite 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.| NYSE Composite vs. Sphere Entertainment Co | NYSE Composite vs. Weibo Corp | NYSE Composite vs. BCE Inc | NYSE Composite vs. Pinterest |
| Aqr Managed vs. Virtus Seix Government | Aqr Managed vs. Lord Abbett Government | Aqr Managed vs. Aig Government Money | Aqr Managed vs. Franklin Adjustable Government |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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