Correlation Between Aqr Global and Westwood Market
Can any of the company-specific risk be diversified away by investing in both Aqr Global and Westwood Market 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 Westwood Market 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 Westwood Market Neutral, you can compare the effects of market volatilities on Aqr Global and Westwood Market 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 Westwood Market. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aqr Global and Westwood Market.
Diversification Opportunities for Aqr Global and Westwood Market
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Aqr and Westwood is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Aqr Global Macro and Westwood Market Neutral in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Westwood Market Neutral 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 Westwood Market. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Westwood Market Neutral has no effect on the direction of Aqr Global i.e., Aqr Global and Westwood Market go up and down completely randomly.
Pair Corralation between Aqr Global and Westwood Market
Assuming the 90 days horizon Aqr Global Macro is expected to generate 6.26 times more return on investment than Westwood Market. However, Aqr Global is 6.26 times more volatile than Westwood Market Neutral. It trades about 0.12 of its potential returns per unit of risk. Westwood Market Neutral is currently generating about 0.44 per unit of risk. If you would invest 948.00 in Aqr Global Macro on November 4, 2024 and sell it today you would earn a total of 12.00 from holding Aqr Global Macro or generate 1.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.0% |
| Values | Daily Returns |
Aqr Global Macro vs. Westwood Market Neutral
Performance |
| Timeline |
| Aqr Global Macro |
| Westwood Market Neutral |
Aqr Global and Westwood Market Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aqr Global and Westwood Market
The main advantage of trading using opposite Aqr Global and Westwood Market positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aqr Global position performs unexpectedly, Westwood Market 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 Westwood Market will offset losses from the drop in Westwood Market's long position.| Aqr Global vs. Elfun Government Money | Aqr Global vs. Hsbc Government Money | Aqr Global vs. Virtus Seix Government | Aqr Global vs. Ridgeworth Seix Government |
| Westwood Market vs. Invesco Technology Fund | Westwood Market vs. Columbia Global Technology | Westwood Market vs. Science Technology Fund | Westwood Market vs. Dreyfus Technology 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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