Correlation Between Aqr Managed and American High-income
Can any of the company-specific risk be diversified away by investing in both Aqr Managed and American 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 Managed and American High-income 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 American High Income Municipal, you can compare the effects of market volatilities on Aqr Managed and American 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 Managed with a short position of American High-income. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aqr Managed and American High-income.
Diversification Opportunities for Aqr Managed and American High-income
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Aqr and American is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Aqr Managed Futures and American High Income Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American High Income 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 American 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 American High Income has no effect on the direction of Aqr Managed i.e., Aqr Managed and American High-income go up and down completely randomly.
Pair Corralation between Aqr Managed and American High-income
Assuming the 90 days horizon Aqr Managed Futures is expected to generate 2.81 times more return on investment than American High-income. However, Aqr Managed is 2.81 times more volatile than American High Income Municipal. It trades about 0.15 of its potential returns per unit of risk. American High Income Municipal is currently generating about 0.18 per unit of risk. If you would invest 794.00 in Aqr Managed Futures on September 4, 2024 and sell it today you would earn a total of 23.00 from holding Aqr Managed Futures or generate 2.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aqr Managed Futures vs. American High Income Municipal
Performance |
| Timeline |
| Aqr Managed Futures |
| American High Income |
Aqr Managed and American High-income Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aqr Managed and American High-income
The main advantage of trading using opposite Aqr Managed and American High-income positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aqr Managed position performs unexpectedly, American 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 American High-income will offset losses from the drop in American High-income'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 |
| American High-income vs. T Rowe Price | American High-income vs. Aqr Managed Futures | American High-income vs. Ab Bond Inflation | American High-income vs. Western Asset Inflation |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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