Correlation Between Aqr Long and Fidelity Contrafund
Can any of the company-specific risk be diversified away by investing in both Aqr Long and Fidelity Contrafund 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 and Fidelity Contrafund 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 Fidelity Contrafund K6, you can compare the effects of market volatilities on Aqr Long and Fidelity Contrafund 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 with a short position of Fidelity Contrafund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aqr Long and Fidelity Contrafund.
Diversification Opportunities for Aqr Long and Fidelity Contrafund
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Aqr and Fidelity is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Aqr Long Short Equity and Fidelity Contrafund K6 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Contrafund and Aqr Long 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 Fidelity Contrafund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Contrafund has no effect on the direction of Aqr Long i.e., Aqr Long and Fidelity Contrafund go up and down completely randomly.
Pair Corralation between Aqr Long and Fidelity Contrafund
Assuming the 90 days horizon Aqr Long is expected to generate 1.27 times less return on investment than Fidelity Contrafund. But when comparing it to its historical volatility, Aqr Long Short Equity is 1.47 times less risky than Fidelity Contrafund. It trades about 0.18 of its potential returns per unit of risk. Fidelity Contrafund K6 is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 3,164 in Fidelity Contrafund K6 on September 13, 2024 and sell it today you would earn a total of 76.00 from holding Fidelity Contrafund K6 or generate 2.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aqr Long Short Equity vs. Fidelity Contrafund K6
Performance |
| Timeline |
| Aqr Long Short |
| Fidelity Contrafund |
Aqr Long and Fidelity Contrafund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aqr Long and Fidelity Contrafund
The main advantage of trading using opposite Aqr Long and Fidelity Contrafund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aqr Long position performs unexpectedly, Fidelity Contrafund 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 Fidelity Contrafund will offset losses from the drop in Fidelity Contrafund's long position.| Aqr Long vs. Needham Aggressive Growth | Aqr Long vs. Alliancebernstein Global High | Aqr Long vs. Artisan High Income | Aqr Long vs. Pace High Yield |
| Fidelity Contrafund vs. Fidelity Freedom 2015 | Fidelity Contrafund vs. Fidelity Puritan Fund | Fidelity Contrafund vs. Fidelity Puritan Fund | Fidelity Contrafund vs. Fidelity Pennsylvania Municipal |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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