Correlation Between Aqr Long-short and Americafirst Defensive
Can any of the company-specific risk be diversified away by investing in both Aqr Long-short and Americafirst Defensive 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 Americafirst Defensive 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 Americafirst Defensive Growth, you can compare the effects of market volatilities on Aqr Long-short and Americafirst Defensive 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 Americafirst Defensive. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aqr Long-short and Americafirst Defensive.
Diversification Opportunities for Aqr Long-short and Americafirst Defensive
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Aqr and Americafirst is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Aqr Long Short Equity and Americafirst Defensive Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Americafirst Defensive 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 Americafirst Defensive. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Americafirst Defensive has no effect on the direction of Aqr Long-short i.e., Aqr Long-short and Americafirst Defensive go up and down completely randomly.
Pair Corralation between Aqr Long-short and Americafirst Defensive
Assuming the 90 days horizon Aqr Long Short Equity is expected to generate 1.96 times more return on investment than Americafirst Defensive. However, Aqr Long-short is 1.96 times more volatile than Americafirst Defensive Growth. It trades about 0.46 of its potential returns per unit of risk. Americafirst Defensive Growth is currently generating about 0.29 per unit of risk. If you would invest 1,640 in Aqr Long Short Equity on September 2, 2024 and sell it today you would earn a total of 72.00 from holding Aqr Long Short Equity or generate 4.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aqr Long Short Equity vs. Americafirst Defensive Growth
Performance |
| Timeline |
| Aqr Long Short |
| Americafirst Defensive |
Aqr Long-short and Americafirst Defensive Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aqr Long-short and Americafirst Defensive
The main advantage of trading using opposite Aqr Long-short and Americafirst Defensive positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aqr Long-short position performs unexpectedly, Americafirst Defensive 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 Americafirst Defensive will offset losses from the drop in Americafirst Defensive's long position.| Aqr Long-short vs. Great West Real Estate | Aqr Long-short vs. Virtus Real Estate | Aqr Long-short vs. Commonwealth Real Estate | Aqr Long-short vs. Us Real Estate |
| Americafirst Defensive vs. Scharf Fund Retail | Americafirst Defensive vs. Sarofim Equity | Americafirst Defensive vs. Icon Equity Income | Americafirst Defensive vs. The Gabelli Equity |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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