Correlation Between Aqr Long-short and Valic Company
Can any of the company-specific risk be diversified away by investing in both Aqr Long-short and Valic Company 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 Valic Company 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 Valic Company I, you can compare the effects of market volatilities on Aqr Long-short and Valic Company 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 Valic Company. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aqr Long-short and Valic Company.
Diversification Opportunities for Aqr Long-short and Valic Company
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Aqr and Valic is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Aqr Long Short Equity and Valic Company I in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Valic Company I 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 Valic Company. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Valic Company I has no effect on the direction of Aqr Long-short i.e., Aqr Long-short and Valic Company go up and down completely randomly.
Pair Corralation between Aqr Long-short and Valic Company
Assuming the 90 days horizon Aqr Long Short Equity is expected to generate 0.95 times more return on investment than Valic Company. However, Aqr Long Short Equity is 1.05 times less risky than Valic Company. It trades about 0.2 of its potential returns per unit of risk. Valic Company I is currently generating about 0.1 per unit of risk. If you would invest 1,075 in Aqr Long Short Equity on August 26, 2024 and sell it today you would earn a total of 632.00 from holding Aqr Long Short Equity or generate 58.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aqr Long Short Equity vs. Valic Company I
Performance |
| Timeline |
| Aqr Long Short |
| Valic Company I |
Aqr Long-short and Valic Company Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aqr Long-short and Valic Company
The main advantage of trading using opposite Aqr Long-short and Valic Company positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aqr Long-short position performs unexpectedly, Valic Company 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 Valic Company will offset losses from the drop in Valic Company'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 |
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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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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