Correlation Between Otter Creek and Aqr Long-short
Can any of the company-specific risk be diversified away by investing in both Otter Creek and Aqr Long-short 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 Otter Creek and Aqr Long-short into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Otter Creek Longshort and Aqr Long Short Equity, you can compare the effects of market volatilities on Otter Creek and Aqr Long-short 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 Otter Creek with a short position of Aqr Long-short. Check out your portfolio center. Please also check ongoing floating volatility patterns of Otter Creek and Aqr Long-short.
Diversification Opportunities for Otter Creek and Aqr Long-short
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Otter and Aqr is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Otter Creek Longshort and Aqr Long Short Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aqr Long Short and Otter Creek 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 Otter Creek Longshort are associated (or correlated) with Aqr Long-short. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aqr Long Short has no effect on the direction of Otter Creek i.e., Otter Creek and Aqr Long-short go up and down completely randomly.
Pair Corralation between Otter Creek and Aqr Long-short
Assuming the 90 days horizon Otter Creek is expected to generate 1.1 times less return on investment than Aqr Long-short. In addition to that, Otter Creek is 1.62 times more volatile than Aqr Long Short Equity. It trades about 0.11 of its total potential returns per unit of risk. Aqr Long Short Equity is currently generating about 0.2 per unit of volatility. If you would invest 1,356 in Aqr Long Short Equity on August 29, 2024 and sell it today you would earn a total of 282.00 from holding Aqr Long Short Equity or generate 20.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.52% |
| Values | Daily Returns |
Otter Creek Longshort vs. Aqr Long Short Equity
Performance |
| Timeline |
| Otter Creek Longshort |
| Aqr Long Short |
Otter Creek and Aqr Long-short Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Otter Creek and Aqr Long-short
The main advantage of trading using opposite Otter Creek and Aqr Long-short positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Otter Creek position performs unexpectedly, Aqr Long-short 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 Long-short will offset losses from the drop in Aqr Long-short's long position.| Otter Creek vs. Boston Partners Global | Otter Creek vs. Asg Managed Futures | Otter Creek vs. Pimco Trends Managed | Otter Creek vs. Aqr Long Short Equity |
| Aqr Long-short vs. Neuberger Berman Long | Aqr Long-short vs. Neuberger Berman Long | Aqr Long-short vs. Diamond Hill Long Short | Aqr Long-short vs. Pimco Rae Worldwide |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
Other Complementary Tools
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals |