Correlation Between Aqr Long-short and Hotchkis Wiley
Can any of the company-specific risk be diversified away by investing in both Aqr Long-short and Hotchkis Wiley 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 Hotchkis Wiley 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 Hotchkis Wiley Diversified, you can compare the effects of market volatilities on Aqr Long-short and Hotchkis Wiley 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 Hotchkis Wiley. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aqr Long-short and Hotchkis Wiley.
Diversification Opportunities for Aqr Long-short and Hotchkis Wiley
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Aqr and Hotchkis is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Aqr Long Short Equity and Hotchkis Wiley Diversified in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hotchkis Wiley Diver 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 Hotchkis Wiley. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hotchkis Wiley Diver has no effect on the direction of Aqr Long-short i.e., Aqr Long-short and Hotchkis Wiley go up and down completely randomly.
Pair Corralation between Aqr Long-short and Hotchkis Wiley
Assuming the 90 days horizon Aqr Long Short Equity is expected to generate 0.49 times more return on investment than Hotchkis Wiley. However, Aqr Long Short Equity is 2.04 times less risky than Hotchkis Wiley. It trades about 0.3 of its potential returns per unit of risk. Hotchkis Wiley Diversified is currently generating about 0.14 per unit of risk. If you would invest 1,555 in Aqr Long Short Equity on August 29, 2024 and sell it today you would earn a total of 83.00 from holding Aqr Long Short Equity or generate 5.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 97.67% |
| Values | Daily Returns |
Aqr Long Short Equity vs. Hotchkis Wiley Diversified
Performance |
| Timeline |
| Aqr Long Short |
| Hotchkis Wiley Diver |
Aqr Long-short and Hotchkis Wiley Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aqr Long-short and Hotchkis Wiley
The main advantage of trading using opposite Aqr Long-short and Hotchkis Wiley positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aqr Long-short position performs unexpectedly, Hotchkis Wiley 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 Hotchkis Wiley will offset losses from the drop in Hotchkis Wiley's long position.| Aqr Long-short vs. Neuberger Berman Long | Aqr Long-short vs. Neuberger Berman Long | Aqr Long-short vs. Pimco Rae Worldwide |
| Hotchkis Wiley vs. Siit Ultra Short | Hotchkis Wiley vs. Old Westbury Short Term | Hotchkis Wiley vs. Astor Longshort Fund | Hotchkis Wiley vs. Aqr Long Short Equity |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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