Correlation Between Aqr Diversified and American Beacon
Can any of the company-specific risk be diversified away by investing in both Aqr Diversified and American Beacon 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 American Beacon 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 American Beacon Shapiro, you can compare the effects of market volatilities on Aqr Diversified and American Beacon 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 American Beacon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aqr Diversified and American Beacon.
Diversification Opportunities for Aqr Diversified and American Beacon
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Aqr and American is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Aqr Diversified Arbitrage and American Beacon Shapiro in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Beacon Shapiro 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 American Beacon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Beacon Shapiro has no effect on the direction of Aqr Diversified i.e., Aqr Diversified and American Beacon go up and down completely randomly.
Pair Corralation between Aqr Diversified and American Beacon
Assuming the 90 days horizon Aqr Diversified Arbitrage is expected to generate 0.25 times more return on investment than American Beacon. However, Aqr Diversified Arbitrage is 3.97 times less risky than American Beacon. It trades about -0.15 of its potential returns per unit of risk. American Beacon Shapiro is currently generating about -0.1 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 Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Aqr Diversified Arbitrage vs. American Beacon Shapiro
Performance |
| Timeline |
| Aqr Diversified Arbitrage |
| American Beacon Shapiro |
Aqr Diversified and American Beacon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aqr Diversified and American Beacon
The main advantage of trading using opposite Aqr Diversified and American Beacon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aqr Diversified position performs unexpectedly, American Beacon 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 American Beacon will offset losses from the drop in American Beacon'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 |
| American Beacon vs. Enhanced Large Pany | American Beacon vs. T Rowe Price | American Beacon vs. T Rowe Price | American Beacon vs. Pace Large Growth |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
Other Complementary Tools
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges |