Correlation Between Aqr Long and High Yield
Can any of the company-specific risk be diversified away by investing in both Aqr Long and High Yield 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 High Yield 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 High Yield Fund, you can compare the effects of market volatilities on Aqr Long and High Yield 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 High Yield. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aqr Long and High Yield.
Diversification Opportunities for Aqr Long and High Yield
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Aqr and High is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Aqr Long Short Equity and High Yield Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on High Yield Fund 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 High Yield. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of High Yield Fund has no effect on the direction of Aqr Long i.e., Aqr Long and High Yield go up and down completely randomly.
Pair Corralation between Aqr Long and High Yield
Assuming the 90 days horizon Aqr Long Short Equity is expected to generate 2.09 times more return on investment than High Yield. However, Aqr Long is 2.09 times more volatile than High Yield Fund. It trades about 0.21 of its potential returns per unit of risk. High Yield Fund is currently generating about 0.17 per unit of risk. If you would invest 1,200 in Aqr Long Short Equity on September 12, 2024 and sell it today you would earn a total of 463.00 from holding Aqr Long Short Equity or generate 38.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aqr Long Short Equity vs. High Yield Fund
Performance |
| Timeline |
| Aqr Long Short |
| High Yield Fund |
Aqr Long and High Yield Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aqr Long and High Yield
The main advantage of trading using opposite Aqr Long and High Yield positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aqr Long position performs unexpectedly, High Yield 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 High Yield will offset losses from the drop in High Yield's long position.| Aqr Long vs. Diamond Hill Long Short | Aqr Long vs. Pimco Rae Worldwide | Aqr Long vs. SCOR PK | Aqr Long vs. Morningstar Unconstrained Allocation |
| High Yield vs. The National Tax Free | High Yield vs. Multisector Bond Sma | High Yield vs. T Rowe Price | High Yield vs. Morningstar Defensive Bond |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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