Correlation Between Aqr Managed and Americafirst Defensive
Can any of the company-specific risk be diversified away by investing in both Aqr Managed and Americafirst Defensive 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 Americafirst Defensive 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 Americafirst Defensive Growth, you can compare the effects of market volatilities on Aqr Managed and Americafirst Defensive 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 Americafirst Defensive. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aqr Managed and Americafirst Defensive.
Diversification Opportunities for Aqr Managed and Americafirst Defensive
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Aqr and Americafirst is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Aqr Managed Futures and Americafirst Defensive Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Americafirst Defensive 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 Americafirst Defensive. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Americafirst Defensive has no effect on the direction of Aqr Managed i.e., Aqr Managed and Americafirst Defensive go up and down completely randomly.
Pair Corralation between Aqr Managed and Americafirst Defensive
Assuming the 90 days horizon Aqr Managed Futures is expected to generate 4.0 times more return on investment than Americafirst Defensive. However, Aqr Managed is 4.0 times more volatile than Americafirst Defensive Growth. It trades about 0.08 of its potential returns per unit of risk. Americafirst Defensive Growth is currently generating about 0.12 per unit of risk. If you would invest 810.00 in Aqr Managed Futures on August 30, 2024 and sell it today you would earn a total of 12.00 from holding Aqr Managed Futures or generate 1.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Aqr Managed Futures vs. Americafirst Defensive Growth
Performance |
| Timeline |
| Aqr Managed Futures |
| Americafirst Defensive |
Aqr Managed and Americafirst Defensive Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aqr Managed and Americafirst Defensive
The main advantage of trading using opposite Aqr Managed and Americafirst Defensive positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aqr Managed position performs unexpectedly, Americafirst Defensive 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 Americafirst Defensive will offset losses from the drop in Americafirst Defensive's long position.| Aqr Managed vs. Aqr Large Cap | Aqr Managed vs. Aqr International Defensive | Aqr Managed vs. Aqr International Defensive | Aqr Managed vs. Aqr International Defensive |
| Americafirst Defensive vs. Arrow Managed Futures | Americafirst Defensive vs. Aqr Managed Futures | Americafirst Defensive vs. American Funds Inflation | Americafirst Defensive vs. Oklahoma College Savings |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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