Correlation Between Aqr Long-short and Caldwell Orkin
Can any of the company-specific risk be diversified away by investing in both Aqr Long-short and Caldwell Orkin 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 Caldwell Orkin 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 Caldwell Orkin Market, you can compare the effects of market volatilities on Aqr Long-short and Caldwell Orkin 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 Caldwell Orkin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aqr Long-short and Caldwell Orkin.
Diversification Opportunities for Aqr Long-short and Caldwell Orkin
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Aqr and Caldwell is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Aqr Long Short Equity and Caldwell Orkin Market in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Caldwell Orkin 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 Caldwell Orkin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Caldwell Orkin Market has no effect on the direction of Aqr Long-short i.e., Aqr Long-short and Caldwell Orkin go up and down completely randomly.
Pair Corralation between Aqr Long-short and Caldwell Orkin
Assuming the 90 days horizon Aqr Long-short is expected to generate 1.31 times less return on investment than Caldwell Orkin. But when comparing it to its historical volatility, Aqr Long Short Equity is 1.71 times less risky than Caldwell Orkin. It trades about 0.18 of its potential returns per unit of risk. Caldwell Orkin Market is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 2,868 in Caldwell Orkin Market on August 24, 2024 and sell it today you would earn a total of 2,380 from holding Caldwell Orkin Market or generate 82.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Aqr Long Short Equity vs. Caldwell Orkin Market
Performance |
| Timeline |
| Aqr Long Short |
| Caldwell Orkin Market |
Aqr Long-short and Caldwell Orkin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aqr Long-short and Caldwell Orkin
The main advantage of trading using opposite Aqr Long-short and Caldwell Orkin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aqr Long-short position performs unexpectedly, Caldwell Orkin 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 Caldwell Orkin will offset losses from the drop in Caldwell Orkin's long position.| Aqr Long-short vs. Neuberger Berman Long | Aqr Long-short vs. Neuberger Berman Long | Aqr Long-short vs. Neuberger Berman Long | Aqr Long-short vs. Diamond Hill Long Short |
| Caldwell Orkin vs. Multisector Bond Sma | Caldwell Orkin vs. California Bond Fund | Caldwell Orkin vs. Mirova Global Green | Caldwell Orkin vs. Barings Active Short |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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