Correlation Between Aqr Managed and Domini Impact
Can any of the company-specific risk be diversified away by investing in both Aqr Managed and Domini Impact 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 Domini Impact 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 Domini Impact International, you can compare the effects of market volatilities on Aqr Managed and Domini Impact 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 Domini Impact. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aqr Managed and Domini Impact.
Diversification Opportunities for Aqr Managed and Domini Impact
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between AQR and Domini is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Aqr Managed Futures and Domini Impact International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Domini Impact Intern 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 Domini Impact. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Domini Impact Intern has no effect on the direction of Aqr Managed i.e., Aqr Managed and Domini Impact go up and down completely randomly.
Pair Corralation between Aqr Managed and Domini Impact
Assuming the 90 days horizon Aqr Managed is expected to generate 1.49 times less return on investment than Domini Impact. In addition to that, Aqr Managed is 1.11 times more volatile than Domini Impact International. It trades about 0.05 of its total potential returns per unit of risk. Domini Impact International is currently generating about 0.08 per unit of volatility. If you would invest 687.00 in Domini Impact International on December 2, 2024 and sell it today you would earn a total of 257.00 from holding Domini Impact International or generate 37.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aqr Managed Futures vs. Domini Impact International
Performance |
| Timeline |
| Aqr Managed Futures |
| Domini Impact Intern |
Aqr Managed and Domini Impact Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aqr Managed and Domini Impact
The main advantage of trading using opposite Aqr Managed and Domini Impact positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aqr Managed position performs unexpectedly, Domini Impact 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 Domini Impact will offset losses from the drop in Domini Impact's long position.| Aqr Managed vs. Asg Managed Futures | ||
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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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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