Correlation Between Aqr Global and Rbc International
Can any of the company-specific risk be diversified away by investing in both Aqr Global and Rbc International 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 Global and Rbc International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aqr Global Macro and Rbc International Opportunities, you can compare the effects of market volatilities on Aqr Global and Rbc International 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 Global with a short position of Rbc International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aqr Global and Rbc International.
Diversification Opportunities for Aqr Global and Rbc International
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Aqr and Rbc is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Aqr Global Macro and Rbc International Opportunitie in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rbc International and Aqr Global 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 Global Macro are associated (or correlated) with Rbc International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rbc International has no effect on the direction of Aqr Global i.e., Aqr Global and Rbc International go up and down completely randomly.
Pair Corralation between Aqr Global and Rbc International
Assuming the 90 days horizon Aqr Global is expected to generate 1.14 times less return on investment than Rbc International. But when comparing it to its historical volatility, Aqr Global Macro is 1.41 times less risky than Rbc International. It trades about 0.11 of its potential returns per unit of risk. Rbc International Opportunities is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 790.00 in Rbc International Opportunities on November 3, 2024 and sell it today you would earn a total of 59.00 from holding Rbc International Opportunities or generate 7.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aqr Global Macro vs. Rbc International Opportunitie
Performance |
| Timeline |
| Aqr Global Macro |
| Rbc International |
Aqr Global and Rbc International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aqr Global and Rbc International
The main advantage of trading using opposite Aqr Global and Rbc International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aqr Global position performs unexpectedly, Rbc International 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 Rbc International will offset losses from the drop in Rbc International's long position.| Aqr Global vs. Catalystmillburn Hedge Strategy | Aqr Global vs. Catalystmillburn Hedge Strategy | Aqr Global vs. Catalystmillburn Hedge Strategy | Aqr Global vs. Catalystmillburn Hedge Strategy |
| Rbc International vs. Old Westbury Fixed | Rbc International vs. Locorr Dynamic Equity | Rbc International vs. Gmo International Equity | Rbc International vs. Us Vector Equity |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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