Correlation Between Aqr Long-short and Siit Emerging
Can any of the company-specific risk be diversified away by investing in both Aqr Long-short and Siit 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 Siit 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 Siit Emerging Markets, you can compare the effects of market volatilities on Aqr Long-short and Siit 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 Siit Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aqr Long-short and Siit Emerging.
Diversification Opportunities for Aqr Long-short and Siit Emerging
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Aqr and Siit is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Aqr Long Short Equity and Siit Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Siit 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 Siit Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Siit Emerging Markets has no effect on the direction of Aqr Long-short i.e., Aqr Long-short and Siit Emerging go up and down completely randomly.
Pair Corralation between Aqr Long-short and Siit Emerging
Assuming the 90 days horizon Aqr Long Short Equity is expected to generate 0.58 times more return on investment than Siit Emerging. However, Aqr Long Short Equity is 1.72 times less risky than Siit Emerging. It trades about 0.35 of its potential returns per unit of risk. Siit Emerging Markets is currently generating about -0.15 per unit of risk. If you would invest 1,608 in Aqr Long Short Equity on August 28, 2024 and sell it today you would earn a total of 99.00 from holding Aqr Long Short Equity or generate 6.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aqr Long Short Equity vs. Siit Emerging Markets
Performance |
| Timeline |
| Aqr Long Short |
| Siit Emerging Markets |
Aqr Long-short and Siit Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aqr Long-short and Siit Emerging
The main advantage of trading using opposite Aqr Long-short and Siit Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aqr Long-short position performs unexpectedly, Siit 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 Siit Emerging will offset losses from the drop in Siit Emerging'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 |
| Siit Emerging vs. Dreyfus Natural Resources | Siit Emerging vs. Franklin Natural Resources | Siit Emerging vs. Alpsalerian Energy Infrastructure | Siit Emerging vs. Short Oil Gas |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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