Correlation Between Aqr Long-short and High Income
Can any of the company-specific risk be diversified away by investing in both Aqr Long-short and High Income 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 High Income 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 High Income Fund, you can compare the effects of market volatilities on Aqr Long-short and High Income 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 High Income. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aqr Long-short and High Income.
Diversification Opportunities for Aqr Long-short and High Income
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Aqr and High is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Aqr Long Short Equity and High Income Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on High Income Fund 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 High Income. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of High Income Fund has no effect on the direction of Aqr Long-short i.e., Aqr Long-short and High Income go up and down completely randomly.
Pair Corralation between Aqr Long-short and High Income
Assuming the 90 days horizon Aqr Long Short Equity is expected to generate 1.69 times more return on investment than High Income. However, Aqr Long-short is 1.69 times more volatile than High Income Fund. It trades about 0.24 of its potential returns per unit of risk. High Income Fund is currently generating about 0.16 per unit of risk. If you would invest 1,138 in Aqr Long Short Equity on August 31, 2024 and sell it today you would earn a total of 562.00 from holding Aqr Long Short Equity or generate 49.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.73% |
| Values | Daily Returns |
Aqr Long Short Equity vs. High Income Fund
Performance |
| Timeline |
| Aqr Long Short |
| High Income Fund |
Aqr Long-short and High Income Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aqr Long-short and High Income
The main advantage of trading using opposite Aqr Long-short and High Income positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aqr Long-short position performs unexpectedly, High Income 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 High Income will offset losses from the drop in High Income's long position.| Aqr Long-short vs. Rbc Global Equity | Aqr Long-short vs. The Gabelli Equity | Aqr Long-short vs. Ultra Short Fixed Income | Aqr Long-short vs. Icon Equity Income |
| High Income vs. Transamerica Financial Life | High Income vs. John Hancock Financial | High Income vs. Fidelity Advisor Financial | High Income vs. Gabelli Global Financial |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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