Correlation Between Aqr Long-short and Columbia Dividend
Can any of the company-specific risk be diversified away by investing in both Aqr Long-short and Columbia Dividend 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 Long-short and Columbia Dividend into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aqr Long Short Equity and Columbia Dividend Opportunity, you can compare the effects of market volatilities on Aqr Long-short and Columbia Dividend 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 Long-short with a short position of Columbia Dividend. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aqr Long-short and Columbia Dividend.
Diversification Opportunities for Aqr Long-short and Columbia Dividend
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Aqr and Columbia is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Aqr Long Short Equity and Columbia Dividend Opportunity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Columbia Dividend and Aqr Long-short 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 Long Short Equity are associated (or correlated) with Columbia Dividend. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Columbia Dividend has no effect on the direction of Aqr Long-short i.e., Aqr Long-short and Columbia Dividend go up and down completely randomly.
Pair Corralation between Aqr Long-short and Columbia Dividend
Assuming the 90 days horizon Aqr Long-short is expected to generate 1.07 times less return on investment than Columbia Dividend. But when comparing it to its historical volatility, Aqr Long Short Equity is 1.42 times less risky than Columbia Dividend. It trades about 0.2 of its potential returns per unit of risk. Columbia Dividend Opportunity is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 3,353 in Columbia Dividend Opportunity on August 26, 2024 and sell it today you would earn a total of 931.00 from holding Columbia Dividend Opportunity or generate 27.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aqr Long Short Equity vs. Columbia Dividend Opportunity
Performance |
| Timeline |
| Aqr Long Short |
| Columbia Dividend |
Aqr Long-short and Columbia Dividend Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aqr Long-short and Columbia Dividend
The main advantage of trading using opposite Aqr Long-short and Columbia Dividend positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aqr Long-short position performs unexpectedly, Columbia Dividend 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 Columbia Dividend will offset losses from the drop in Columbia Dividend's long position.| Aqr Long-short vs. Auer Growth Fund | Aqr Long-short vs. Archer Balanced Fund | Aqr Long-short vs. Ab Value Fund | Aqr Long-short vs. Qs Growth Fund |
| Columbia Dividend vs. Aqr Long Short Equity | Columbia Dividend vs. Jhancock Short Duration | Columbia Dividend vs. Guggenheim Long Short | Columbia Dividend vs. Ultra Short Fixed Income |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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