Correlation Between Origin Emerging and Aqr International
Can any of the company-specific risk be diversified away by investing in both Origin Emerging 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 Origin Emerging and Aqr International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Origin Emerging Markets and Aqr International Defensive, you can compare the effects of market volatilities on Origin Emerging 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 Origin Emerging with a short position of Aqr International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Origin Emerging and Aqr International.
Diversification Opportunities for Origin Emerging and Aqr International
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Origin and Aqr is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Origin Emerging Markets and Aqr International Defensive in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aqr International and Origin Emerging 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 Origin Emerging Markets 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 Origin Emerging i.e., Origin Emerging and Aqr International go up and down completely randomly.
Pair Corralation between Origin Emerging and Aqr International
Assuming the 90 days horizon Origin Emerging Markets is expected to generate 1.48 times more return on investment than Aqr International. However, Origin Emerging is 1.48 times more volatile than Aqr International Defensive. It trades about -0.09 of its potential returns per unit of risk. Aqr International Defensive is currently generating about -0.21 per unit of risk. If you would invest 1,047 in Origin Emerging Markets on August 29, 2024 and sell it today you would lose (20.00) from holding Origin Emerging Markets or give up 1.91% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Origin Emerging Markets vs. Aqr International Defensive
Performance |
| Timeline |
| Origin Emerging Markets |
| Aqr International |
Origin Emerging and Aqr International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Origin Emerging and Aqr International
The main advantage of trading using opposite Origin Emerging and Aqr International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Origin Emerging 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.| Origin Emerging vs. Gabelli Gold Fund | Origin Emerging vs. Goldman Sachs Centrated | Origin Emerging vs. Fidelity Advisor Gold | Origin Emerging vs. James Balanced Golden |
| Aqr International vs. Pace Large Value | Aqr International vs. Touchstone Large Cap | Aqr International vs. Fundamental Large Cap | Aqr International vs. Old Westbury Large |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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