Correlation Between Aqr Diversified and Icon Financial
Can any of the company-specific risk be diversified away by investing in both Aqr Diversified and Icon Financial 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 Icon Financial 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 Icon Financial Fund, you can compare the effects of market volatilities on Aqr Diversified and Icon Financial 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 Icon Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aqr Diversified and Icon Financial.
Diversification Opportunities for Aqr Diversified and Icon Financial
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Aqr and Icon is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Aqr Diversified Arbitrage and Icon Financial Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Icon Financial 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 Icon Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Icon Financial has no effect on the direction of Aqr Diversified i.e., Aqr Diversified and Icon Financial go up and down completely randomly.
Pair Corralation between Aqr Diversified and Icon Financial
Assuming the 90 days horizon Aqr Diversified Arbitrage is expected to generate 0.05 times more return on investment than Icon Financial. However, Aqr Diversified Arbitrage is 20.7 times less risky than Icon Financial. It trades about -0.15 of its potential returns per unit of risk. Icon Financial Fund is currently generating about -0.16 per unit of risk. If you would invest 1,227 in Aqr Diversified Arbitrage on September 13, 2024 and sell it today you would lose (6.00) from holding Aqr Diversified Arbitrage or give up 0.49% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aqr Diversified Arbitrage vs. Icon Financial Fund
Performance |
| Timeline |
| Aqr Diversified Arbitrage |
| Icon Financial |
Aqr Diversified and Icon Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aqr Diversified and Icon Financial
The main advantage of trading using opposite Aqr Diversified and Icon Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aqr Diversified position performs unexpectedly, Icon Financial 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 Icon Financial will offset losses from the drop in Icon Financial's long position.| Aqr Diversified vs. Sit Government Securities | Aqr Diversified vs. Dunham Porategovernment Bond | Aqr Diversified vs. Intermediate Government Bond | Aqr Diversified vs. Lord Abbett Government |
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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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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