Correlation Between Aqr Managed and Prudential Jennison
Can any of the company-specific risk be diversified away by investing in both Aqr Managed and Prudential Jennison 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 Managed and Prudential Jennison into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aqr Managed Futures and Prudential Jennison Equity, you can compare the effects of market volatilities on Aqr Managed and Prudential Jennison 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 Managed with a short position of Prudential Jennison. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aqr Managed and Prudential Jennison.
Diversification Opportunities for Aqr Managed and Prudential Jennison
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Aqr and PRUDENTIAL is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Aqr Managed Futures and Prudential Jennison Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prudential Jennison and Aqr Managed 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 Managed Futures are associated (or correlated) with Prudential Jennison. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prudential Jennison has no effect on the direction of Aqr Managed i.e., Aqr Managed and Prudential Jennison go up and down completely randomly.
Pair Corralation between Aqr Managed and Prudential Jennison
Assuming the 90 days horizon Aqr Managed is expected to generate 2.23 times less return on investment than Prudential Jennison. In addition to that, Aqr Managed is 1.45 times more volatile than Prudential Jennison Equity. It trades about 0.03 of its total potential returns per unit of risk. Prudential Jennison Equity is currently generating about 0.08 per unit of volatility. If you would invest 998.00 in Prudential Jennison Equity on September 4, 2024 and sell it today you would earn a total of 201.00 from holding Prudential Jennison Equity or generate 20.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.73% |
| Values | Daily Returns |
Aqr Managed Futures vs. Prudential Jennison Equity
Performance |
| Timeline |
| Aqr Managed Futures |
| Prudential Jennison |
Aqr Managed and Prudential Jennison Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aqr Managed and Prudential Jennison
The main advantage of trading using opposite Aqr Managed and Prudential Jennison positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aqr Managed position performs unexpectedly, Prudential Jennison 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 Prudential Jennison will offset losses from the drop in Prudential Jennison's long position.| Aqr Managed vs. T Rowe Price | Aqr Managed vs. Falcon Focus Scv | Aqr Managed vs. Iaadx | Aqr Managed vs. Leggmason Partners Institutional |
| Prudential Jennison vs. Dreyfusstandish Global Fixed | Prudential Jennison vs. Ab Global Real | Prudential Jennison vs. Qs Global Equity | Prudential Jennison vs. Artisan Global Unconstrained |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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