Correlation Between Aqr Diversified and Global Infrastructure
Can any of the company-specific risk be diversified away by investing in both Aqr Diversified and Global Infrastructure 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 Global Infrastructure 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 Global Infrastructure Fund, you can compare the effects of market volatilities on Aqr Diversified and Global Infrastructure 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 Global Infrastructure. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aqr Diversified and Global Infrastructure.
Diversification Opportunities for Aqr Diversified and Global Infrastructure
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Aqr and Global is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Aqr Diversified Arbitrage and Global Infrastructure Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Infrastructure 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 Global Infrastructure. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Infrastructure has no effect on the direction of Aqr Diversified i.e., Aqr Diversified and Global Infrastructure go up and down completely randomly.
Pair Corralation between Aqr Diversified and Global Infrastructure
Assuming the 90 days horizon Aqr Diversified Arbitrage is expected to under-perform the Global Infrastructure. But the mutual fund apears to be less risky and, when comparing its historical volatility, Aqr Diversified Arbitrage is 4.15 times less risky than Global Infrastructure. The mutual fund trades about -0.15 of its potential returns per unit of risk. The Global Infrastructure Fund is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 938.00 in Global Infrastructure Fund on September 13, 2024 and sell it today you would earn a total of 1.00 from holding Global Infrastructure Fund or generate 0.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Aqr Diversified Arbitrage vs. Global Infrastructure Fund
Performance |
| Timeline |
| Aqr Diversified Arbitrage |
| Global Infrastructure |
Aqr Diversified and Global Infrastructure Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aqr Diversified and Global Infrastructure
The main advantage of trading using opposite Aqr Diversified and Global Infrastructure positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aqr Diversified position performs unexpectedly, Global Infrastructure 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 Global Infrastructure will offset losses from the drop in Global Infrastructure'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 |
| Global Infrastructure vs. International Developed Markets | Global Infrastructure vs. Global Real Estate | Global Infrastructure vs. Global Real Estate | Global Infrastructure vs. Global Real Estate |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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