Correlation Between Aqr Diversified and Kellner Merger
Can any of the company-specific risk be diversified away by investing in both Aqr Diversified and Kellner Merger 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 Kellner Merger 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 Kellner Merger Fund, you can compare the effects of market volatilities on Aqr Diversified and Kellner Merger 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 Kellner Merger. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aqr Diversified and Kellner Merger.
Diversification Opportunities for Aqr Diversified and Kellner Merger
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Aqr and Kellner is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Aqr Diversified Arbitrage and Kellner Merger Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kellner Merger 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 Kellner Merger. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kellner Merger has no effect on the direction of Aqr Diversified i.e., Aqr Diversified and Kellner Merger go up and down completely randomly.
Pair Corralation between Aqr Diversified and Kellner Merger
Assuming the 90 days horizon Aqr Diversified Arbitrage is expected to under-perform the Kellner Merger. But the mutual fund apears to be less risky and, when comparing its historical volatility, Aqr Diversified Arbitrage is 1.1 times less risky than Kellner Merger. The mutual fund trades about -0.25 of its potential returns per unit of risk. The Kellner Merger Fund is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 1,089 in Kellner Merger Fund on September 4, 2024 and sell it today you would earn a total of 6.00 from holding Kellner Merger Fund or generate 0.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aqr Diversified Arbitrage vs. Kellner Merger Fund
Performance |
| Timeline |
| Aqr Diversified Arbitrage |
| Kellner Merger |
Aqr Diversified and Kellner Merger Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aqr Diversified and Kellner Merger
The main advantage of trading using opposite Aqr Diversified and Kellner Merger positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aqr Diversified position performs unexpectedly, Kellner Merger 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 Kellner Merger will offset losses from the drop in Kellner Merger'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 |
| Kellner Merger vs. Kellner Merger Fund | Kellner Merger vs. Artisan High Income | Kellner Merger vs. Tiaa Cref Large Cap Growth | Kellner Merger vs. Vanguard 500 Index |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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