Correlation Between Aqr Diversified and Stone Ridge
Can any of the company-specific risk be diversified away by investing in both Aqr Diversified and Stone Ridge 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 Stone Ridge 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 Stone Ridge Diversified, you can compare the effects of market volatilities on Aqr Diversified and Stone Ridge 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 Stone Ridge. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aqr Diversified and Stone Ridge.
Diversification Opportunities for Aqr Diversified and Stone Ridge
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Aqr and Stone is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Aqr Diversified Arbitrage and Stone Ridge Diversified in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stone Ridge Diversified 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 Stone Ridge. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stone Ridge Diversified has no effect on the direction of Aqr Diversified i.e., Aqr Diversified and Stone Ridge go up and down completely randomly.
Pair Corralation between Aqr Diversified and Stone Ridge
Assuming the 90 days horizon Aqr Diversified Arbitrage is expected to under-perform the Stone Ridge. But the mutual fund apears to be less risky and, when comparing its historical volatility, Aqr Diversified Arbitrage is 1.12 times less risky than Stone Ridge. The mutual fund trades about -0.15 of its potential returns per unit of risk. The Stone Ridge Diversified is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 1,132 in Stone Ridge Diversified on September 13, 2024 and sell it today you would earn a total of 10.00 from holding Stone Ridge Diversified or generate 0.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aqr Diversified Arbitrage vs. Stone Ridge Diversified
Performance |
| Timeline |
| Aqr Diversified Arbitrage |
| Stone Ridge Diversified |
Aqr Diversified and Stone Ridge Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aqr Diversified and Stone Ridge
The main advantage of trading using opposite Aqr Diversified and Stone Ridge positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aqr Diversified position performs unexpectedly, Stone Ridge 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 Stone Ridge will offset losses from the drop in Stone Ridge's long position.| Aqr Diversified vs. Aqr Large Cap | Aqr Diversified vs. Aqr Large Cap | Aqr Diversified vs. Aqr International Defensive | Aqr Diversified vs. Aqr International Defensive |
| Stone Ridge vs. Touchstone Premium Yield | Stone Ridge vs. Dws Government Money | Stone Ridge vs. Alliancebernstein National Municipal | Stone Ridge vs. T Rowe Price |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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