Correlation Between Aqr Long-short and Gmo Alternative
Can any of the company-specific risk be diversified away by investing in both Aqr Long-short and Gmo Alternative 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 Gmo Alternative 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 Gmo Alternative Allocation, you can compare the effects of market volatilities on Aqr Long-short and Gmo Alternative 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 Gmo Alternative. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aqr Long-short and Gmo Alternative.
Diversification Opportunities for Aqr Long-short and Gmo Alternative
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Aqr and Gmo is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Aqr Long Short Equity and Gmo Alternative Allocation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gmo Alternative Allo 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 Gmo Alternative. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gmo Alternative Allo has no effect on the direction of Aqr Long-short i.e., Aqr Long-short and Gmo Alternative go up and down completely randomly.
Pair Corralation between Aqr Long-short and Gmo Alternative
Assuming the 90 days horizon Aqr Long Short Equity is expected to generate 1.53 times more return on investment than Gmo Alternative. However, Aqr Long-short is 1.53 times more volatile than Gmo Alternative Allocation. It trades about 0.39 of its potential returns per unit of risk. Gmo Alternative Allocation is currently generating about 0.06 per unit of risk. If you would invest 1,563 in Aqr Long Short Equity on November 3, 2024 and sell it today you would earn a total of 61.00 from holding Aqr Long Short Equity or generate 3.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aqr Long Short Equity vs. Gmo Alternative Allocation
Performance |
| Timeline |
| Aqr Long Short |
| Gmo Alternative Allo |
Aqr Long-short and Gmo Alternative Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aqr Long-short and Gmo Alternative
The main advantage of trading using opposite Aqr Long-short and Gmo Alternative positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aqr Long-short position performs unexpectedly, Gmo Alternative 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 Gmo Alternative will offset losses from the drop in Gmo Alternative's long position.| Aqr Long-short vs. Hsbc Government Money | Aqr Long-short vs. Federated Government Income | Aqr Long-short vs. Aig Government Money | Aqr Long-short vs. Voya Government Money |
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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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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