Correlation Between Aqr Long-short and Morgan Stanley
Can any of the company-specific risk be diversified away by investing in both Aqr Long-short and Morgan Stanley 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 Morgan Stanley 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 Morgan Stanley China, you can compare the effects of market volatilities on Aqr Long-short and Morgan Stanley 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 Morgan Stanley. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aqr Long-short and Morgan Stanley.
Diversification Opportunities for Aqr Long-short and Morgan Stanley
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Aqr and Morgan is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Aqr Long Short Equity and Morgan Stanley China in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Morgan Stanley China 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 Morgan Stanley. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Morgan Stanley China has no effect on the direction of Aqr Long-short i.e., Aqr Long-short and Morgan Stanley go up and down completely randomly.
Pair Corralation between Aqr Long-short and Morgan Stanley
Assuming the 90 days horizon Aqr Long Short Equity is expected to generate 0.5 times more return on investment than Morgan Stanley. However, Aqr Long Short Equity is 1.98 times less risky than Morgan Stanley. It trades about 0.18 of its potential returns per unit of risk. Morgan Stanley China is currently generating about -0.02 per unit of risk. If you would invest 1,019 in Aqr Long Short Equity on January 9, 2025 and sell it today you would earn a total of 592.00 from holding Aqr Long Short Equity or generate 58.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aqr Long Short Equity vs. Morgan Stanley China
Performance |
| Timeline |
| Aqr Long Short |
| Morgan Stanley China |
Aqr Long-short and Morgan Stanley Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aqr Long-short and Morgan Stanley
The main advantage of trading using opposite Aqr Long-short and Morgan Stanley positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aqr Long-short position performs unexpectedly, Morgan Stanley 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 Morgan Stanley will offset losses from the drop in Morgan Stanley's long position.| Aqr Long-short vs. Rbc Emerging Markets | Aqr Long-short vs. T Rowe Price | Aqr Long-short vs. Siit Emerging Markets | Aqr Long-short vs. Ashmore Emerging Markets |
| Morgan Stanley vs. Gamco Natural Resources | Morgan Stanley vs. Thrivent Natural Resources | Morgan Stanley vs. Short Oil Gas | Morgan Stanley vs. Pimco Energy Tactical |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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