Correlation Between Aqr Managed and Capital World
Can any of the company-specific risk be diversified away by investing in both Aqr Managed and Capital World 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 Capital World 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 Capital World Bond, you can compare the effects of market volatilities on Aqr Managed and Capital World 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 Capital World. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aqr Managed and Capital World.
Diversification Opportunities for Aqr Managed and Capital World
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Aqr and Capital is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Aqr Managed Futures and Capital World Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capital World Bond 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 Capital World. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capital World Bond has no effect on the direction of Aqr Managed i.e., Aqr Managed and Capital World go up and down completely randomly.
Pair Corralation between Aqr Managed and Capital World
Assuming the 90 days horizon Aqr Managed Futures is expected to generate 1.97 times more return on investment than Capital World. However, Aqr Managed is 1.97 times more volatile than Capital World Bond. It trades about 0.16 of its potential returns per unit of risk. Capital World Bond is currently generating about -0.06 per unit of risk. If you would invest 834.00 in Aqr Managed Futures on October 20, 2024 and sell it today you would earn a total of 16.00 from holding Aqr Managed Futures or generate 1.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aqr Managed Futures vs. Capital World Bond
Performance |
| Timeline |
| Aqr Managed Futures |
| Capital World Bond |
Aqr Managed and Capital World Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aqr Managed and Capital World
The main advantage of trading using opposite Aqr Managed and Capital World positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aqr Managed position performs unexpectedly, Capital World 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 Capital World will offset losses from the drop in Capital World's long position.| Aqr Managed vs. World Energy Fund | Aqr Managed vs. Salient Mlp Energy | Aqr Managed vs. Pimco Energy Tactical | Aqr Managed vs. Ivy Natural Resources |
| Capital World vs. Virtus High Yield | Capital World vs. Ab High Income | Capital World vs. Americafirst Monthly Risk On | Capital World vs. Prudential High Yield |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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