Correlation Between Aqr Long-short and Frost Total
Can any of the company-specific risk be diversified away by investing in both Aqr Long-short and Frost Total 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 Frost Total 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 Frost Total Return, you can compare the effects of market volatilities on Aqr Long-short and Frost Total 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 Frost Total. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aqr Long-short and Frost Total.
Diversification Opportunities for Aqr Long-short and Frost Total
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Aqr and Frost is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Aqr Long Short Equity and Frost Total Return in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Frost Total Return 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 Frost Total. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Frost Total Return has no effect on the direction of Aqr Long-short i.e., Aqr Long-short and Frost Total go up and down completely randomly.
Pair Corralation between Aqr Long-short and Frost Total
Assuming the 90 days horizon Aqr Long Short Equity is expected to generate 1.83 times more return on investment than Frost Total. However, Aqr Long-short is 1.83 times more volatile than Frost Total Return. It trades about 0.2 of its potential returns per unit of risk. Frost Total Return is currently generating about 0.09 per unit of risk. If you would invest 1,283 in Aqr Long Short Equity on November 3, 2024 and sell it today you would earn a total of 341.00 from holding Aqr Long Short Equity or generate 26.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aqr Long Short Equity vs. Frost Total Return
Performance |
| Timeline |
| Aqr Long Short |
| Frost Total Return |
Aqr Long-short and Frost Total Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aqr Long-short and Frost Total
The main advantage of trading using opposite Aqr Long-short and Frost Total positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aqr Long-short position performs unexpectedly, Frost Total 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 Frost Total will offset losses from the drop in Frost Total's long position.| Aqr Long-short vs. Morningstar International Equity | Aqr Long-short vs. Jhancock Global Equity | Aqr Long-short vs. Franklin Equity Income | Aqr Long-short vs. Touchstone International Equity |
| Frost Total vs. Qs Large Cap | Frost Total vs. Qs Large Cap | Frost Total vs. Dunham Large Cap | Frost Total vs. Smead Value Fund |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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