Correlation Between Aqr Global and New Perspective
Can any of the company-specific risk be diversified away by investing in both Aqr Global and New Perspective 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 New Perspective 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 New Perspective Fund, you can compare the effects of market volatilities on Aqr Global and New Perspective 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 New Perspective. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aqr Global and New Perspective.
Diversification Opportunities for Aqr Global and New Perspective
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Aqr and New is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Aqr Global Macro and New Perspective Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New Perspective 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 New Perspective. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New Perspective has no effect on the direction of Aqr Global i.e., Aqr Global and New Perspective go up and down completely randomly.
Pair Corralation between Aqr Global and New Perspective
Assuming the 90 days horizon Aqr Global is expected to generate 1.32 times less return on investment than New Perspective. But when comparing it to its historical volatility, Aqr Global Macro is 1.31 times less risky than New Perspective. It trades about 0.16 of its potential returns per unit of risk. New Perspective Fund is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 6,285 in New Perspective Fund on October 26, 2024 and sell it today you would earn a total of 151.00 from holding New Perspective Fund or generate 2.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aqr Global Macro vs. New Perspective Fund
Performance |
| Timeline |
| Aqr Global Macro |
| New Perspective |
Aqr Global and New Perspective Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aqr Global and New Perspective
The main advantage of trading using opposite Aqr Global and New Perspective positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aqr Global position performs unexpectedly, New Perspective 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 New Perspective will offset losses from the drop in New Perspective's long position.| Aqr Global vs. L Abbett Growth | Aqr Global vs. Eip Growth And | Aqr Global vs. Growth Allocation Fund | Aqr Global vs. Mid Cap Growth |
| New Perspective vs. Legg Mason Global | New Perspective vs. Aqr Global Macro | New Perspective vs. Kinetics Global Fund | New Perspective vs. Rbc Global Opportunities |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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