Correlation Between Aqr Large and Government Bond
Can any of the company-specific risk be diversified away by investing in both Aqr Large and Government Bond 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 Aqr Large and Government Bond into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aqr Large Cap and Government Bond Fund, you can compare the effects of market volatilities on Aqr Large and Government Bond 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 Aqr Large with a short position of Government Bond. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aqr Large and Government Bond.
Diversification Opportunities for Aqr Large and Government Bond
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between AQR and Government is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Aqr Large Cap and Government Bond Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Government Bond and Aqr Large 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 Aqr Large Cap are associated (or correlated) with Government Bond. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Government Bond has no effect on the direction of Aqr Large i.e., Aqr Large and Government Bond go up and down completely randomly.
Pair Corralation between Aqr Large and Government Bond
Assuming the 90 days horizon Aqr Large Cap is expected to generate 3.05 times more return on investment than Government Bond. However, Aqr Large is 3.05 times more volatile than Government Bond Fund. It trades about 0.23 of its potential returns per unit of risk. Government Bond Fund is currently generating about -0.09 per unit of risk. If you would invest 2,057 in Aqr Large Cap on August 26, 2024 and sell it today you would earn a total of 99.00 from holding Aqr Large Cap or generate 4.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aqr Large Cap vs. Government Bond Fund
Performance |
| Timeline |
| Aqr Large Cap |
| Government Bond |
Aqr Large and Government Bond Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aqr Large and Government Bond
The main advantage of trading using opposite Aqr Large and Government Bond positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aqr Large position performs unexpectedly, Government Bond 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 Government Bond will offset losses from the drop in Government Bond's long position.| Aqr Large vs. Aqr Large Cap | Aqr Large vs. Aqr Large Cap | Aqr Large vs. Aqr International Defensive | Aqr Large vs. Aqr International Defensive |
| Government Bond vs. Qs Large Cap | Government Bond vs. Aqr Large Cap | Government Bond vs. Siit Large Cap | Government Bond vs. Massmutual Select T |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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