Correlation Between Aqr Long-short and Pimco Income
Can any of the company-specific risk be diversified away by investing in both Aqr Long-short and Pimco 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 Pimco 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 Pimco Income Fund, you can compare the effects of market volatilities on Aqr Long-short and Pimco 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 Pimco Income. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aqr Long-short and Pimco Income.
Diversification Opportunities for Aqr Long-short and Pimco Income
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Aqr and Pimco is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Aqr Long Short Equity and Pimco Income Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pimco Income 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 Pimco Income. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pimco Income has no effect on the direction of Aqr Long-short i.e., Aqr Long-short and Pimco Income go up and down completely randomly.
Pair Corralation between Aqr Long-short and Pimco Income
Assuming the 90 days horizon Aqr Long Short Equity is expected to generate 1.66 times more return on investment than Pimco Income. However, Aqr Long-short is 1.66 times more volatile than Pimco Income Fund. It trades about 0.18 of its potential returns per unit of risk. Pimco Income Fund is currently generating about 0.08 per unit of risk. If you would invest 1,074 in Aqr Long Short Equity on August 27, 2024 and sell it today you would earn a total of 633.00 from holding Aqr Long Short Equity or generate 58.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aqr Long Short Equity vs. Pimco Income Fund
Performance |
| Timeline |
| Aqr Long Short |
| Pimco Income |
Aqr Long-short and Pimco Income Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aqr Long-short and Pimco Income
The main advantage of trading using opposite Aqr Long-short and Pimco Income positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aqr Long-short position performs unexpectedly, Pimco 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 Pimco Income will offset losses from the drop in Pimco Income's long position.| Aqr Long-short vs. Aqr Large Cap | Aqr Long-short vs. Aqr Large Cap | Aqr Long-short vs. Aqr International Defensive | Aqr Long-short vs. Aqr International Defensive |
| Pimco Income vs. Shelton Emerging Markets | Pimco Income vs. Western Asset Diversified | Pimco Income vs. Crossmark Steward Equity | Pimco Income vs. Origin Emerging Markets |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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