Correlation Between Aqr Diversified and Franklin Mutual
Can any of the company-specific risk be diversified away by investing in both Aqr Diversified and Franklin Mutual 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 Franklin Mutual 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 Franklin Mutual Beacon, you can compare the effects of market volatilities on Aqr Diversified and Franklin Mutual 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 Franklin Mutual. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aqr Diversified and Franklin Mutual.
Diversification Opportunities for Aqr Diversified and Franklin Mutual
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Aqr and Franklin is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Aqr Diversified Arbitrage and Franklin Mutual Beacon in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Mutual Beacon 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 Franklin Mutual. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Mutual Beacon has no effect on the direction of Aqr Diversified i.e., Aqr Diversified and Franklin Mutual go up and down completely randomly.
Pair Corralation between Aqr Diversified and Franklin Mutual
Assuming the 90 days horizon Aqr Diversified is expected to generate 5.96 times less return on investment than Franklin Mutual. But when comparing it to its historical volatility, Aqr Diversified Arbitrage is 5.43 times less risky than Franklin Mutual. It trades about 0.21 of its potential returns per unit of risk. Franklin Mutual Beacon is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 1,569 in Franklin Mutual Beacon on November 7, 2024 and sell it today you would earn a total of 54.00 from holding Franklin Mutual Beacon or generate 3.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aqr Diversified Arbitrage vs. Franklin Mutual Beacon
Performance |
| Timeline |
| Aqr Diversified Arbitrage |
| Franklin Mutual Beacon |
Aqr Diversified and Franklin Mutual Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aqr Diversified and Franklin Mutual
The main advantage of trading using opposite Aqr Diversified and Franklin Mutual positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aqr Diversified position performs unexpectedly, Franklin Mutual 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 Franklin Mutual will offset losses from the drop in Franklin Mutual's long position.| Aqr Diversified vs. Baillie Gifford Health | Aqr Diversified vs. Invesco Global Health | Aqr Diversified vs. Eventide Healthcare Life | Aqr Diversified vs. Blackrock Health Sciences |
| Franklin Mutual vs. Ultra Short Fixed Income | Franklin Mutual vs. Ms Global Fixed | Franklin Mutual vs. Massmutual Premier High | Franklin Mutual vs. Bbh Intermediate Municipal |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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