Correlation Between Aqr Long-short and Steward Funds
Can any of the company-specific risk be diversified away by investing in both Aqr Long-short and Steward Funds 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 Steward Funds 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 Steward Funds , you can compare the effects of market volatilities on Aqr Long-short and Steward Funds 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 Steward Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aqr Long-short and Steward Funds.
Diversification Opportunities for Aqr Long-short and Steward Funds
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Aqr and Steward is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Aqr Long Short Equity and Steward Funds in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Steward Funds 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 Steward Funds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Steward Funds has no effect on the direction of Aqr Long-short i.e., Aqr Long-short and Steward Funds go up and down completely randomly.
Pair Corralation between Aqr Long-short and Steward Funds
Assuming the 90 days horizon Aqr Long-short is expected to generate 1.23 times less return on investment than Steward Funds. But when comparing it to its historical volatility, Aqr Long Short Equity is 2.04 times less risky than Steward Funds. It trades about 0.46 of its potential returns per unit of risk. Steward Funds is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest 3,045 in Steward Funds on August 25, 2024 and sell it today you would earn a total of 177.00 from holding Steward Funds or generate 5.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aqr Long Short Equity vs. Steward Funds
Performance |
| Timeline |
| Aqr Long Short |
| Steward Funds |
Aqr Long-short and Steward Funds Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aqr Long-short and Steward Funds
The main advantage of trading using opposite Aqr Long-short and Steward Funds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aqr Long-short position performs unexpectedly, Steward Funds 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 Steward Funds will offset losses from the drop in Steward Funds' long position.| Aqr Long-short vs. Invesco Global Health | Aqr Long-short vs. Health Biotchnology Portfolio | Aqr Long-short vs. Live Oak Health | Aqr Long-short vs. Alger Health Sciences |
| Steward Funds vs. Jhancock Short Duration | Steward Funds vs. Aqr Long Short Equity | Steward Funds vs. Quantitative Longshort Equity | Steward Funds vs. Short Intermediate Bond Fund |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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