Correlation Between Aqr Managed and Cullen High
Can any of the company-specific risk be diversified away by investing in both Aqr Managed and Cullen High 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 Cullen High 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 Cullen High Dividend, you can compare the effects of market volatilities on Aqr Managed and Cullen High 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 Cullen High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aqr Managed and Cullen High.
Diversification Opportunities for Aqr Managed and Cullen High
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between AQR and Cullen is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Aqr Managed Futures and Cullen High Dividend in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cullen High Dividend 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 Cullen High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cullen High Dividend has no effect on the direction of Aqr Managed i.e., Aqr Managed and Cullen High go up and down completely randomly.
Pair Corralation between Aqr Managed and Cullen High
Assuming the 90 days horizon Aqr Managed is expected to generate 1.99 times less return on investment than Cullen High. In addition to that, Aqr Managed is 1.44 times more volatile than Cullen High Dividend. It trades about 0.03 of its total potential returns per unit of risk. Cullen High Dividend is currently generating about 0.07 per unit of volatility. If you would invest 1,264 in Cullen High Dividend on September 2, 2024 and sell it today you would earn a total of 223.00 from holding Cullen High Dividend or generate 17.64% 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. Cullen High Dividend
Performance |
| Timeline |
| Aqr Managed Futures |
| Cullen High Dividend |
Aqr Managed and Cullen High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aqr Managed and Cullen High
The main advantage of trading using opposite Aqr Managed and Cullen High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aqr Managed position performs unexpectedly, Cullen High 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 Cullen High will offset losses from the drop in Cullen High'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 |
| Cullen High vs. Cullen Small Cap | Cullen High vs. Cullen Small Cap | Cullen High vs. Cullen Small Cap | Cullen High vs. Cullen Value Fund |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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