Correlation Between Aqr Large and Alger Health
Can any of the company-specific risk be diversified away by investing in both Aqr Large and Alger Health 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 Alger Health 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 Alger Health Sciences, you can compare the effects of market volatilities on Aqr Large and Alger Health 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 Alger Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aqr Large and Alger Health.
Diversification Opportunities for Aqr Large and Alger Health
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between AQR and Alger is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Aqr Large Cap and Alger Health Sciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alger Health Sciences 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 Alger Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alger Health Sciences has no effect on the direction of Aqr Large i.e., Aqr Large and Alger Health go up and down completely randomly.
Pair Corralation between Aqr Large and Alger Health
Assuming the 90 days horizon Aqr Large Cap is expected to generate 1.41 times more return on investment than Alger Health. However, Aqr Large is 1.41 times more volatile than Alger Health Sciences. It trades about 0.07 of its potential returns per unit of risk. Alger Health Sciences is currently generating about 0.01 per unit of risk. If you would invest 1,412 in Aqr Large Cap on August 24, 2024 and sell it today you would earn a total of 729.00 from holding Aqr Large Cap or generate 51.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aqr Large Cap vs. Alger Health Sciences
Performance |
| Timeline |
| Aqr Large Cap |
| Alger Health Sciences |
Aqr Large and Alger Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aqr Large and Alger Health
The main advantage of trading using opposite Aqr Large and Alger Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aqr Large position performs unexpectedly, Alger Health 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 Alger Health will offset losses from the drop in Alger Health's long position.| Aqr Large vs. Nuveen Large Cap | Aqr Large vs. Nuveen Large Cap | Aqr Large vs. HUMANA INC | Aqr Large vs. SCOR PK |
| Alger Health vs. Aqr Large Cap | Alger Health vs. Siit Large Cap | Alger Health vs. Pace Large Growth | Alger Health vs. Quantitative U S |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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