Correlation Between Adams Natural and Aqr Managed
Can any of the company-specific risk be diversified away by investing in both Adams Natural 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 Adams Natural and Aqr Managed into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Adams Natural Resources and Aqr Managed Futures, you can compare the effects of market volatilities on Adams Natural 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 Adams Natural with a short position of Aqr Managed. Check out your portfolio center. Please also check ongoing floating volatility patterns of Adams Natural and Aqr Managed.
Diversification Opportunities for Adams Natural and Aqr Managed
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Adams and Aqr is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Adams Natural Resources 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 Adams Natural 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 Adams Natural Resources 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 Adams Natural i.e., Adams Natural and Aqr Managed go up and down completely randomly.
Pair Corralation between Adams Natural and Aqr Managed
Considering the 90-day investment horizon Adams Natural Resources is expected to generate 1.25 times more return on investment than Aqr Managed. However, Adams Natural is 1.25 times more volatile than Aqr Managed Futures. It trades about 0.01 of its potential returns per unit of risk. Aqr Managed Futures is currently generating about -0.01 per unit of risk. If you would invest 2,170 in Adams Natural Resources on November 4, 2024 and sell it today you would earn a total of 0.00 from holding Adams Natural Resources or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Adams Natural Resources vs. Aqr Managed Futures
Performance |
| Timeline |
| Adams Natural Resources |
| Aqr Managed Futures |
Adams Natural and Aqr Managed Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Adams Natural and Aqr Managed
The main advantage of trading using opposite Adams Natural and Aqr Managed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Adams Natural 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.| Adams Natural vs. Liberty All Star | Adams Natural vs. Tri Continental Closed | Adams Natural vs. Royce Value Closed | Adams Natural vs. Central Securities |
| Aqr Managed vs. Nasdaq 100 2x Strategy | Aqr Managed vs. Federated Emerging Market | Aqr Managed vs. Barings Emerging Markets | Aqr Managed 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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