Correlation Between Aqr Managed and Capital Income
Can any of the company-specific risk be diversified away by investing in both Aqr Managed and Capital 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 Capital 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 Capital Income Builder, you can compare the effects of market volatilities on Aqr Managed and Capital 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 Capital Income. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aqr Managed and Capital Income.
Diversification Opportunities for Aqr Managed and Capital Income
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Aqr and Capital is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Aqr Managed Futures and Capital Income Builder in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capital Income Builder 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 Income. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capital Income Builder has no effect on the direction of Aqr Managed i.e., Aqr Managed and Capital Income go up and down completely randomly.
Pair Corralation between Aqr Managed and Capital Income
Assuming the 90 days horizon Aqr Managed Futures is expected to generate 1.68 times more return on investment than Capital Income. However, Aqr Managed is 1.68 times more volatile than Capital Income Builder. It trades about 0.25 of its potential returns per unit of risk. Capital Income Builder is currently generating about -0.02 per unit of risk. If you would invest 809.00 in Aqr Managed Futures on August 28, 2024 and sell it today you would earn a total of 30.00 from holding Aqr Managed Futures or generate 3.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Aqr Managed Futures vs. Capital Income Builder
Performance |
| Timeline |
| Aqr Managed Futures |
| Capital Income Builder |
Aqr Managed and Capital Income Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aqr Managed and Capital Income
The main advantage of trading using opposite Aqr Managed and Capital Income positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aqr Managed position performs unexpectedly, Capital 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 Capital Income will offset losses from the drop in Capital Income's long position.| Aqr Managed vs. Federated Equity Income | Aqr Managed vs. Locorr Dynamic Equity | Aqr Managed vs. Ab Select Equity | Aqr Managed vs. Dreyfusstandish Global Fixed |
| Capital Income vs. Income Fund Of | Capital Income vs. New World Fund | Capital Income vs. American Mutual Fund | Capital Income vs. American Mutual 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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