Correlation Between Aqr Large and High Yield
Can any of the company-specific risk be diversified away by investing in both Aqr Large and High Yield 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 High Yield 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 High Yield Fund, you can compare the effects of market volatilities on Aqr Large and High Yield 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 High Yield. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aqr Large and High Yield.
Diversification Opportunities for Aqr Large and High Yield
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Aqr and High is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Aqr Large Cap and High Yield Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on High Yield Fund 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 High Yield. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of High Yield Fund has no effect on the direction of Aqr Large i.e., Aqr Large and High Yield go up and down completely randomly.
Pair Corralation between Aqr Large and High Yield
Assuming the 90 days horizon Aqr Large Cap is expected to generate 5.36 times more return on investment than High Yield. However, Aqr Large is 5.36 times more volatile than High Yield Fund. It trades about 0.21 of its potential returns per unit of risk. High Yield Fund is currently generating about 0.13 per unit of risk. If you would invest 2,076 in Aqr Large Cap on August 31, 2024 and sell it today you would earn a total of 93.00 from holding Aqr Large Cap or generate 4.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aqr Large Cap vs. High Yield Fund
Performance |
| Timeline |
| Aqr Large Cap |
| High Yield Fund |
Aqr Large and High Yield Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aqr Large and High Yield
The main advantage of trading using opposite Aqr Large and High Yield positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aqr Large position performs unexpectedly, High Yield 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 High Yield will offset losses from the drop in High Yield's long position.| Aqr Large vs. Allianzgi Health Sciences | Aqr Large vs. Lord Abbett Health | Aqr Large vs. Blackrock Health Sciences | Aqr Large vs. Health Biotchnology Portfolio |
| High Yield vs. Vanguard High Yield Corporate | High Yield vs. Vanguard High Yield Porate | High Yield vs. Blackrock Hi Yld | High Yield vs. Blackrock 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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