Correlation Between Aqr Diversified and Cavanal Hill
Can any of the company-specific risk be diversified away by investing in both Aqr Diversified and Cavanal Hill 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 Diversified and Cavanal Hill into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aqr Diversified Arbitrage and Cavanal Hill Funds, you can compare the effects of market volatilities on Aqr Diversified and Cavanal Hill 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 Diversified with a short position of Cavanal Hill. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aqr Diversified and Cavanal Hill.
Diversification Opportunities for Aqr Diversified and Cavanal Hill
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Aqr and Cavanal is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Aqr Diversified Arbitrage and Cavanal Hill Funds in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cavanal Hill Funds and Aqr Diversified 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 Diversified Arbitrage are associated (or correlated) with Cavanal Hill. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cavanal Hill Funds has no effect on the direction of Aqr Diversified i.e., Aqr Diversified and Cavanal Hill go up and down completely randomly.
Pair Corralation between Aqr Diversified and Cavanal Hill
Assuming the 90 days horizon Aqr Diversified is expected to generate 1.84 times less return on investment than Cavanal Hill. But when comparing it to its historical volatility, Aqr Diversified Arbitrage is 1.11 times less risky than Cavanal Hill. It trades about 0.08 of its potential returns per unit of risk. Cavanal Hill Funds is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 97.00 in Cavanal Hill Funds on September 4, 2024 and sell it today you would earn a total of 3.00 from holding Cavanal Hill Funds or generate 3.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aqr Diversified Arbitrage vs. Cavanal Hill Funds
Performance |
| Timeline |
| Aqr Diversified Arbitrage |
| Cavanal Hill Funds |
Aqr Diversified and Cavanal Hill Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aqr Diversified and Cavanal Hill
The main advantage of trading using opposite Aqr Diversified and Cavanal Hill positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aqr Diversified position performs unexpectedly, Cavanal Hill 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 Cavanal Hill will offset losses from the drop in Cavanal Hill's long position.| Aqr Diversified vs. Calamos Market Neutral | Aqr Diversified vs. Mondrian Emerging Markets | Aqr Diversified vs. Morgan Stanley Emerging | Aqr Diversified vs. Oklahoma College Savings |
| Cavanal Hill vs. Nationwide Global Equity | Cavanal Hill vs. Commonwealth Global Fund | Cavanal Hill vs. Dreyfusstandish Global Fixed | Cavanal Hill vs. Qs Global Equity |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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