Correlation Between Aqr Long and Hennessy Technology
Can any of the company-specific risk be diversified away by investing in both Aqr Long and Hennessy Technology 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 Hennessy Technology 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 Hennessy Technology Fund, you can compare the effects of market volatilities on Aqr Long and Hennessy Technology 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 Hennessy Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aqr Long and Hennessy Technology.
Diversification Opportunities for Aqr Long and Hennessy Technology
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Aqr and Hennessy is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Aqr Long Short Equity and Hennessy Technology Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hennessy Technology 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 Hennessy Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hennessy Technology has no effect on the direction of Aqr Long i.e., Aqr Long and Hennessy Technology go up and down completely randomly.
Pair Corralation between Aqr Long and Hennessy Technology
Assuming the 90 days horizon Aqr Long Short Equity is expected to generate 0.37 times more return on investment than Hennessy Technology. However, Aqr Long Short Equity is 2.67 times less risky than Hennessy Technology. It trades about 0.22 of its potential returns per unit of risk. Hennessy Technology Fund is currently generating about 0.06 per unit of risk. If you would invest 1,289 in Aqr Long Short Equity on September 14, 2024 and sell it today you would earn a total of 379.00 from holding Aqr Long Short Equity or generate 29.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.6% |
| Values | Daily Returns |
Aqr Long Short Equity vs. Hennessy Technology Fund
Performance |
| Timeline |
| Aqr Long Short |
| Hennessy Technology |
Aqr Long and Hennessy Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aqr Long and Hennessy Technology
The main advantage of trading using opposite Aqr Long and Hennessy Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aqr Long position performs unexpectedly, Hennessy Technology 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 Hennessy Technology will offset losses from the drop in Hennessy Technology's long position.| Aqr Long vs. Wilmington Trust Retirement | Aqr Long vs. Fidelity Managed Retirement | Aqr Long vs. Columbia Moderate Growth | Aqr Long vs. Blackrock Moderate Prepared |
| Hennessy Technology vs. Veea Inc | Hennessy Technology vs. VivoPower International PLC | Hennessy Technology vs. Hennessy Nerstone Growth | Hennessy Technology vs. Hennessy Nerstone Value |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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