Correlation Between Aqr Long-short and The Growth
Can any of the company-specific risk be diversified away by investing in both Aqr Long-short and The Growth 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 The Growth 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 The Growth Equity, you can compare the effects of market volatilities on Aqr Long-short and The Growth 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 The Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aqr Long-short and The Growth.
Diversification Opportunities for Aqr Long-short and The Growth
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Aqr and The is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Aqr Long Short Equity and The Growth Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Growth Equity 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 The Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Growth Equity has no effect on the direction of Aqr Long-short i.e., Aqr Long-short and The Growth go up and down completely randomly.
Pair Corralation between Aqr Long-short and The Growth
Assuming the 90 days horizon Aqr Long Short Equity is expected to generate 0.57 times more return on investment than The Growth. However, Aqr Long Short Equity is 1.75 times less risky than The Growth. It trades about 0.23 of its potential returns per unit of risk. The Growth Equity is currently generating about 0.11 per unit of risk. If you would invest 985.00 in Aqr Long Short Equity on December 4, 2024 and sell it today you would earn a total of 697.00 from holding Aqr Long Short Equity or generate 70.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Aqr Long Short Equity vs. The Growth Equity
Performance |
| Timeline |
| Aqr Long Short |
| Growth Equity |
Aqr Long-short and The Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aqr Long-short and The Growth
The main advantage of trading using opposite Aqr Long-short and The Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aqr Long-short position performs unexpectedly, The Growth 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 The Growth will offset losses from the drop in The Growth's long position.| Aqr Long-short vs. Dreyfus Institutional Reserves | ||
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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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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