Correlation Between Jennison Natural and Aqr International
Can any of the company-specific risk be diversified away by investing in both Jennison Natural 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 Jennison Natural and Aqr International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jennison Natural Resources and Aqr International Momentum, you can compare the effects of market volatilities on Jennison Natural 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 Jennison Natural with a short position of Aqr International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jennison Natural and Aqr International.
Diversification Opportunities for Jennison Natural and Aqr International
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Jennison and Aqr is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Jennison Natural Resources and Aqr International Momentum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aqr International and Jennison 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 Jennison Natural Resources 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 Jennison Natural i.e., Jennison Natural and Aqr International go up and down completely randomly.
Pair Corralation between Jennison Natural and Aqr International
Assuming the 90 days horizon Jennison Natural Resources is expected to generate 1.2 times more return on investment than Aqr International. However, Jennison Natural is 1.2 times more volatile than Aqr International Momentum. It trades about 0.1 of its potential returns per unit of risk. Aqr International Momentum is currently generating about 0.02 per unit of risk. If you would invest 3,992 in Jennison Natural Resources on September 4, 2024 and sell it today you would earn a total of 272.00 from holding Jennison Natural Resources or generate 6.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jennison Natural Resources vs. Aqr International Momentum
Performance |
| Timeline |
| Jennison Natural Res |
| Aqr International |
Jennison Natural and Aqr International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jennison Natural and Aqr International
The main advantage of trading using opposite Jennison Natural and Aqr International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jennison Natural 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.| Jennison Natural vs. Rbc Global Equity | Jennison Natural vs. The Hartford Equity | Jennison Natural vs. Small Cap Equity | Jennison Natural vs. The Fixed Income |
| Aqr International vs. Invesco Energy Fund | Aqr International vs. Energy Basic Materials | Aqr International vs. Goehring Rozencwajg Resources | Aqr International vs. Jennison Natural Resources |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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