Correlation Between Aqr Managed and Blackrock Inflation
Can any of the company-specific risk be diversified away by investing in both Aqr Managed and Blackrock Inflation 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 Blackrock Inflation 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 Blackrock Inflation Protected, you can compare the effects of market volatilities on Aqr Managed and Blackrock Inflation 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 Blackrock Inflation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aqr Managed and Blackrock Inflation.
Diversification Opportunities for Aqr Managed and Blackrock Inflation
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between AQR and Blackrock is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Aqr Managed Futures and Blackrock Inflation Protected in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackrock Inflation 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 Blackrock Inflation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackrock Inflation has no effect on the direction of Aqr Managed i.e., Aqr Managed and Blackrock Inflation go up and down completely randomly.
Pair Corralation between Aqr Managed and Blackrock Inflation
Assuming the 90 days horizon Aqr Managed Futures is expected to generate 2.79 times more return on investment than Blackrock Inflation. However, Aqr Managed is 2.79 times more volatile than Blackrock Inflation Protected. It trades about 0.07 of its potential returns per unit of risk. Blackrock Inflation Protected is currently generating about -0.02 per unit of risk. If you would invest 791.00 in Aqr Managed Futures on September 2, 2024 and sell it today you would earn a total of 26.00 from holding Aqr Managed Futures or generate 3.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aqr Managed Futures vs. Blackrock Inflation Protected
Performance |
| Timeline |
| Aqr Managed Futures |
| Blackrock Inflation |
Aqr Managed and Blackrock Inflation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aqr Managed and Blackrock Inflation
The main advantage of trading using opposite Aqr Managed and Blackrock Inflation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aqr Managed position performs unexpectedly, Blackrock Inflation 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 Blackrock Inflation will offset losses from the drop in Blackrock Inflation's long position.| Aqr Managed vs. Aqr Large Cap | Aqr Managed vs. Aqr Large Cap | Aqr Managed vs. Aqr International Defensive | Aqr Managed vs. Aqr International Defensive |
| Blackrock Inflation vs. Blackrock California Municipal | Blackrock Inflation vs. Blackrock Balanced Capital | Blackrock Inflation vs. Blackrock Eurofund Class | Blackrock Inflation vs. Blackrock Funds |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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