Correlation Between Aqr Long-short and Aqr Equity
Can any of the company-specific risk be diversified away by investing in both Aqr Long-short and Aqr Equity 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 Aqr Equity 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 Aqr Equity Market, you can compare the effects of market volatilities on Aqr Long-short and Aqr Equity 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 Aqr Equity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aqr Long-short and Aqr Equity.
Diversification Opportunities for Aqr Long-short and Aqr Equity
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Aqr and Aqr is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Aqr Long Short Equity and Aqr Equity Market in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aqr Equity Market 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 Aqr Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aqr Equity Market has no effect on the direction of Aqr Long-short i.e., Aqr Long-short and Aqr Equity go up and down completely randomly.
Pair Corralation between Aqr Long-short and Aqr Equity
Assuming the 90 days horizon Aqr Long Short Equity is expected to generate 1.11 times more return on investment than Aqr Equity. However, Aqr Long-short is 1.11 times more volatile than Aqr Equity Market. It trades about 0.43 of its potential returns per unit of risk. Aqr Equity Market is currently generating about 0.39 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 Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aqr Long Short Equity vs. Aqr Equity Market
Performance |
| Timeline |
| Aqr Long Short |
| Aqr Equity Market |
Aqr Long-short and Aqr Equity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aqr Long-short and Aqr Equity
The main advantage of trading using opposite Aqr Long-short and Aqr Equity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aqr Long-short position performs unexpectedly, Aqr Equity 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 Aqr Equity will offset losses from the drop in Aqr Equity'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 |
| Aqr Equity vs. Vanguard Financials Index | Aqr Equity vs. Fidelity Advisor Financial | Aqr Equity vs. Financials Ultrasector Profund | Aqr Equity vs. Blackrock Financial Institutions |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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