Correlation Between Aqr Large and Amcap Fund
Can any of the company-specific risk be diversified away by investing in both Aqr Large and Amcap Fund 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 Amcap Fund 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 Amcap Fund Class, you can compare the effects of market volatilities on Aqr Large and Amcap Fund 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 Amcap Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aqr Large and Amcap Fund.
Diversification Opportunities for Aqr Large and Amcap Fund
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Aqr and Amcap is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Aqr Large Cap and Amcap Fund Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amcap Fund Class 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 Amcap Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amcap Fund Class has no effect on the direction of Aqr Large i.e., Aqr Large and Amcap Fund go up and down completely randomly.
Pair Corralation between Aqr Large and Amcap Fund
Assuming the 90 days horizon Aqr Large is expected to generate 1.44 times less return on investment than Amcap Fund. But when comparing it to its historical volatility, Aqr Large Cap is 1.04 times less risky than Amcap Fund. It trades about 0.11 of its potential returns per unit of risk. Amcap Fund Class is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 3,463 in Amcap Fund Class on November 18, 2024 and sell it today you would earn a total of 87.00 from holding Amcap Fund Class or generate 2.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aqr Large Cap vs. Amcap Fund Class
Performance |
| Timeline |
| Aqr Large Cap |
| Amcap Fund Class |
Aqr Large and Amcap Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aqr Large and Amcap Fund
The main advantage of trading using opposite Aqr Large and Amcap Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aqr Large position performs unexpectedly, Amcap Fund 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 Amcap Fund will offset losses from the drop in Amcap Fund's long position.| Aqr Large vs. Blackrock Health Sciences | Aqr Large vs. Alphacentric Lifesci Healthcare | Aqr Large vs. Baillie Gifford Health | Aqr Large vs. Baron Health Care |
| Amcap Fund vs. Litman Gregory Masters | Amcap Fund vs. Intal High Relative | Amcap Fund vs. Pace High Yield | Amcap Fund vs. Transamerica High Yield |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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