Correlation Between Aqr Long-short and Pimco Investment
Can any of the company-specific risk be diversified away by investing in both Aqr Long-short and Pimco Investment 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 Pimco Investment 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 Pimco Investment Grade, you can compare the effects of market volatilities on Aqr Long-short and Pimco Investment 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 Pimco Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aqr Long-short and Pimco Investment.
Diversification Opportunities for Aqr Long-short and Pimco Investment
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Aqr and Pimco is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Aqr Long Short Equity and Pimco Investment Grade in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pimco Investment Grade 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 Pimco Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pimco Investment Grade has no effect on the direction of Aqr Long-short i.e., Aqr Long-short and Pimco Investment go up and down completely randomly.
Pair Corralation between Aqr Long-short and Pimco Investment
Assuming the 90 days horizon Aqr Long Short Equity is expected to generate 1.12 times more return on investment than Pimco Investment. However, Aqr Long-short is 1.12 times more volatile than Pimco Investment Grade. It trades about 0.43 of its potential returns per unit of risk. Pimco Investment Grade is currently generating about 0.09 per unit of risk. If you would invest 1,572 in Aqr Long Short Equity on August 31, 2024 and sell it today you would earn a total of 67.00 from holding Aqr Long Short Equity or generate 4.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aqr Long Short Equity vs. Pimco Investment Grade
Performance |
| Timeline |
| Aqr Long Short |
| Pimco Investment Grade |
Aqr Long-short and Pimco Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aqr Long-short and Pimco Investment
The main advantage of trading using opposite Aqr Long-short and Pimco Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aqr Long-short position performs unexpectedly, Pimco Investment 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 Pimco Investment will offset losses from the drop in Pimco Investment's long position.| Aqr Long-short vs. L Abbett Growth | Aqr Long-short vs. Growth Opportunities Fund | Aqr Long-short vs. T Rowe Price | Aqr Long-short vs. Chase Growth Fund |
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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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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