Correlation Between Aqr Long and Thornburg Limited
Can any of the company-specific risk be diversified away by investing in both Aqr Long and Thornburg Limited 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 Thornburg Limited 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 Thornburg Limited Term, you can compare the effects of market volatilities on Aqr Long and Thornburg Limited 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 Thornburg Limited. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aqr Long and Thornburg Limited.
Diversification Opportunities for Aqr Long and Thornburg Limited
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Aqr and Thornburg is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Aqr Long Short Equity and Thornburg Limited Term in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thornburg Limited Term 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 Thornburg Limited. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thornburg Limited Term has no effect on the direction of Aqr Long i.e., Aqr Long and Thornburg Limited go up and down completely randomly.
Pair Corralation between Aqr Long and Thornburg Limited
Assuming the 90 days horizon Aqr Long Short Equity is expected to generate 1.91 times more return on investment than Thornburg Limited. However, Aqr Long is 1.91 times more volatile than Thornburg Limited Term. It trades about 0.18 of its potential returns per unit of risk. Thornburg Limited Term is currently generating about 0.05 per unit of risk. If you would invest 1,044 in Aqr Long Short Equity on September 4, 2024 and sell it today you would earn a total of 606.00 from holding Aqr Long Short Equity or generate 58.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Aqr Long Short Equity vs. Thornburg Limited Term
Performance |
| Timeline |
| Aqr Long Short |
| Thornburg Limited Term |
Aqr Long and Thornburg Limited Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aqr Long and Thornburg Limited
The main advantage of trading using opposite Aqr Long and Thornburg Limited positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aqr Long position performs unexpectedly, Thornburg Limited 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 Thornburg Limited will offset losses from the drop in Thornburg Limited'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 |
| Thornburg Limited vs. Thornburg Value Fund | Thornburg Limited vs. Thornburg Value Fund | Thornburg Limited vs. Thornburg International Value | Thornburg Limited vs. Thornburg International 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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