Correlation Between Aqr Long and Icon Natural
Can any of the company-specific risk be diversified away by investing in both Aqr Long and Icon Natural 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 Icon Natural 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 Icon Natural Resources, you can compare the effects of market volatilities on Aqr Long and Icon Natural 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 Icon Natural. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aqr Long and Icon Natural.
Diversification Opportunities for Aqr Long and Icon Natural
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Aqr and Icon is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Aqr Long Short Equity and Icon Natural Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Icon Natural Resources 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 Icon Natural. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Icon Natural Resources has no effect on the direction of Aqr Long i.e., Aqr Long and Icon Natural go up and down completely randomly.
Pair Corralation between Aqr Long and Icon Natural
Assuming the 90 days horizon Aqr Long Short Equity is expected to generate 0.22 times more return on investment than Icon Natural. However, Aqr Long Short Equity is 4.6 times less risky than Icon Natural. It trades about 0.49 of its potential returns per unit of risk. Icon Natural Resources is currently generating about 0.06 per unit of risk. If you would invest 1,579 in Aqr Long Short Equity on September 4, 2024 and sell it today you would earn a total of 71.00 from holding Aqr Long Short Equity or generate 4.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.24% |
| Values | Daily Returns |
Aqr Long Short Equity vs. Icon Natural Resources
Performance |
| Timeline |
| Aqr Long Short |
| Icon Natural Resources |
Aqr Long and Icon Natural Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aqr Long and Icon Natural
The main advantage of trading using opposite Aqr Long and Icon Natural positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aqr Long position performs unexpectedly, Icon Natural 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 Icon Natural will offset losses from the drop in Icon Natural's long position.| Aqr Long vs. Salient Mlp Energy | Aqr Long vs. Gmo Resources | Aqr Long vs. Firsthand Alternative Energy | Aqr Long vs. Franklin Natural Resources |
| Icon Natural vs. Touchstone Ultra Short | Icon Natural vs. Locorr Longshort Modities | Icon Natural vs. Aqr Long Short Equity | Icon Natural vs. Maryland Short Term Tax Free |
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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