Correlation Between Aqr Long-short and Ep Emerging
Can any of the company-specific risk be diversified away by investing in both Aqr Long-short and Ep Emerging 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 Ep Emerging 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 Ep Emerging Markets, you can compare the effects of market volatilities on Aqr Long-short and Ep Emerging 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 Ep Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aqr Long-short and Ep Emerging.
Diversification Opportunities for Aqr Long-short and Ep Emerging
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Aqr and EPASX is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Aqr Long Short Equity and Ep Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ep Emerging Markets 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 Ep Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ep Emerging Markets has no effect on the direction of Aqr Long-short i.e., Aqr Long-short and Ep Emerging go up and down completely randomly.
Pair Corralation between Aqr Long-short and Ep Emerging
Assuming the 90 days horizon Aqr Long Short Equity is expected to generate 0.49 times more return on investment than Ep Emerging. However, Aqr Long Short Equity is 2.05 times less risky than Ep Emerging. It trades about 0.58 of its potential returns per unit of risk. Ep Emerging Markets is currently generating about -0.25 per unit of risk. If you would invest 1,619 in Aqr Long Short Equity on August 26, 2024 and sell it today you would earn a total of 88.00 from holding Aqr Long Short Equity or generate 5.44% 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. Ep Emerging Markets
Performance |
| Timeline |
| Aqr Long Short |
| Ep Emerging Markets |
Aqr Long-short and Ep Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aqr Long-short and Ep Emerging
The main advantage of trading using opposite Aqr Long-short and Ep Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aqr Long-short position performs unexpectedly, Ep Emerging 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 Ep Emerging will offset losses from the drop in Ep Emerging's long position.| Aqr Long-short vs. Angel Oak Financial | Aqr Long-short vs. 1919 Financial Services | Aqr Long-short vs. Financials Ultrasector Profund | Aqr Long-short vs. Transamerica Financial Life |
| Ep Emerging vs. Fidelity Series Government | Ep Emerging vs. Government Securities Fund | Ep Emerging vs. Short Term Government Fund | Ep Emerging vs. Us Government Securities |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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