Correlation Between Aqr Long and Angel Oak
Can any of the company-specific risk be diversified away by investing in both Aqr Long and Angel Oak 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 Angel Oak 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 Angel Oak Financial, you can compare the effects of market volatilities on Aqr Long and Angel Oak 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 Angel Oak. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aqr Long and Angel Oak.
Diversification Opportunities for Aqr Long and Angel Oak
Very poor diversification
The 3 months correlation between Aqr and Angel is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Aqr Long Short Equity and Angel Oak Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Angel Oak Financial 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 Angel Oak. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Angel Oak Financial has no effect on the direction of Aqr Long i.e., Aqr Long and Angel Oak go up and down completely randomly.
Pair Corralation between Aqr Long and Angel Oak
Assuming the 90 days horizon Aqr Long Short Equity is expected to under-perform the Angel Oak. In addition to that, Aqr Long is 8.04 times more volatile than Angel Oak Financial. It trades about -0.12 of its total potential returns per unit of risk. Angel Oak Financial is currently generating about 0.08 per unit of volatility. If you would invest 1,398 in Angel Oak Financial on September 19, 2024 and sell it today you would earn a total of 5.00 from holding Angel Oak Financial or generate 0.36% 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. Angel Oak Financial
Performance |
| Timeline |
| Aqr Long Short |
| Angel Oak Financial |
Aqr Long and Angel Oak Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aqr Long and Angel Oak
The main advantage of trading using opposite Aqr Long and Angel Oak positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aqr Long position performs unexpectedly, Angel Oak 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 Angel Oak will offset losses from the drop in Angel Oak's long position.| Aqr Long vs. Aqr Large Cap | Aqr Long vs. Aqr Large Cap | Aqr Long vs. Aqr International Defensive | Aqr Long vs. Aqr International Defensive |
| Angel Oak vs. Alternative Asset Allocation | Angel Oak vs. Jhancock Disciplined Value | Angel Oak vs. T Rowe Price | Angel Oak vs. Upright Assets Allocation |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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