Correlation Between Aqr Large and Alliancebernstein

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Can any of the company-specific risk be diversified away by investing in both Aqr Large and Alliancebernstein 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 Alliancebernstein 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 Alliancebernstein Bond, you can compare the effects of market volatilities on Aqr Large and Alliancebernstein 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 Alliancebernstein. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aqr Large and Alliancebernstein.

Diversification Opportunities for Aqr Large and Alliancebernstein

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  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between AQR and Alliancebernstein is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Aqr Large Cap and Alliancebernstein Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alliancebernstein 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 Alliancebernstein. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alliancebernstein Bond has no effect on the direction of Aqr Large i.e., Aqr Large and Alliancebernstein go up and down completely randomly.

Pair Corralation between Aqr Large and Alliancebernstein

Assuming the 90 days horizon Aqr Large is expected to generate 48.99 times less return on investment than Alliancebernstein. But when comparing it to its historical volatility, Aqr Large Cap is 38.89 times less risky than Alliancebernstein. It trades about 0.07 of its potential returns per unit of risk. Alliancebernstein Bond is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  363.00  in Alliancebernstein Bond on August 24, 2024 and sell it today you would lose (263.00) from holding Alliancebernstein Bond or give up 72.45% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy50.2%
ValuesDaily Returns

Aqr Large Cap  vs.  Alliancebernstein Bond

 Performance 
       Timeline  
Aqr Large Cap 

Risk-Adjusted Performance

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OK
Compared to the overall equity markets, risk-adjusted returns on investments in Aqr Large Cap are ranked lower than 8 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Aqr Large is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
Alliancebernstein Bond 

Risk-Adjusted Performance

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Weak
 
Strong
Very Weak
Over the last 90 days Alliancebernstein Bond has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Alliancebernstein is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Aqr Large and Alliancebernstein Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Aqr Large and Alliancebernstein

The main advantage of trading using opposite Aqr Large and Alliancebernstein positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aqr Large position performs unexpectedly, Alliancebernstein 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 Alliancebernstein will offset losses from the drop in Alliancebernstein's long position.
The idea behind Aqr Large Cap and Alliancebernstein Bond pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Transaction History module to view history of all your transactions and understand their impact on performance.

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