Correlation Between Aqr Long and Nova Fund
Can any of the company-specific risk be diversified away by investing in both Aqr Long and Nova Fund 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 Nova Fund 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 Nova Fund Class, you can compare the effects of market volatilities on Aqr Long and Nova Fund 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 Nova Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aqr Long and Nova Fund.
Diversification Opportunities for Aqr Long and Nova Fund
Almost no diversification
The 3 months correlation between Aqr and Nova is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Aqr Long Short Equity and Nova Fund Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nova Fund Class 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 Nova Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nova Fund Class has no effect on the direction of Aqr Long i.e., Aqr Long and Nova Fund go up and down completely randomly.
Pair Corralation between Aqr Long and Nova Fund
Assuming the 90 days horizon Aqr Long is expected to generate 1.37 times less return on investment than Nova Fund. But when comparing it to its historical volatility, Aqr Long Short Equity is 2.39 times less risky than Nova Fund. It trades about 0.19 of its potential returns per unit of risk. Nova Fund Class is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 7,359 in Nova Fund Class on September 13, 2024 and sell it today you would earn a total of 6,302 from holding Nova Fund Class or generate 85.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.8% |
| Values | Daily Returns |
Aqr Long Short Equity vs. Nova Fund Class
Performance |
| Timeline |
| Aqr Long Short |
| Nova Fund Class |
Aqr Long and Nova Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aqr Long and Nova Fund
The main advantage of trading using opposite Aqr Long and Nova Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aqr Long position performs unexpectedly, Nova Fund 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 Nova Fund will offset losses from the drop in Nova Fund's long position.| Aqr Long vs. Needham Aggressive Growth | Aqr Long vs. Alliancebernstein Global High | Aqr Long vs. Artisan High Income | Aqr Long vs. Pace High Yield |
| Nova Fund vs. Prudential Real Estate | Nova Fund vs. Forum Real Estate | Nova Fund vs. Redwood Real Estate | Nova Fund vs. Goldman Sachs Real |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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