Correlation Between Aqr Managed and Eafe Choice
Can any of the company-specific risk be diversified away by investing in both Aqr Managed and Eafe Choice 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 Eafe Choice 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 The Eafe Choice, you can compare the effects of market volatilities on Aqr Managed and Eafe Choice 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 Eafe Choice. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aqr Managed and Eafe Choice.
Diversification Opportunities for Aqr Managed and Eafe Choice
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between AQR and Eafe is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Aqr Managed Futures and The Eafe Choice in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eafe Choice 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 Eafe Choice. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eafe Choice has no effect on the direction of Aqr Managed i.e., Aqr Managed and Eafe Choice go up and down completely randomly.
Pair Corralation between Aqr Managed and Eafe Choice
Assuming the 90 days horizon Aqr Managed Futures is expected to generate 0.88 times more return on investment than Eafe Choice. However, Aqr Managed Futures is 1.13 times less risky than Eafe Choice. It trades about 0.14 of its potential returns per unit of risk. The Eafe Choice is currently generating about 0.05 per unit of risk. If you would invest 820.00 in Aqr Managed Futures on December 3, 2024 and sell it today you would earn a total of 63.00 from holding Aqr Managed Futures or generate 7.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 98.36% |
| Values | Daily Returns |
Aqr Managed Futures vs. The Eafe Choice
Performance |
| Timeline |
| Aqr Managed Futures |
| Eafe Choice |
Aqr Managed and Eafe Choice Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aqr Managed and Eafe Choice
The main advantage of trading using opposite Aqr Managed and Eafe Choice positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aqr Managed position performs unexpectedly, Eafe Choice 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 Eafe Choice will offset losses from the drop in Eafe Choice's long position.| Aqr Managed vs. Advent Claymore Convertible | Aqr Managed vs. Lord Abbett Vertible | Aqr Managed vs. Invesco Vertible Securities | Aqr Managed vs. Absolute Convertible Arbitrage |
| Eafe Choice vs. Morgan Stanley Institutional | Eafe Choice vs. The Hartford International | Eafe Choice vs. Touchstone Sands Capital | Eafe Choice vs. Jpmorgan Large Cap |
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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