Correlation Between Aqr Managed and American Funds
Can any of the company-specific risk be diversified away by investing in both Aqr Managed and American Funds 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 American Funds 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 American Funds Growth, you can compare the effects of market volatilities on Aqr Managed and American Funds 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 American Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aqr Managed and American Funds.
Diversification Opportunities for Aqr Managed and American Funds
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Aqr and American is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Aqr Managed Futures and American Funds Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Funds Growth 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 American Funds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Funds Growth has no effect on the direction of Aqr Managed i.e., Aqr Managed and American Funds go up and down completely randomly.
Pair Corralation between Aqr Managed and American Funds
Assuming the 90 days horizon Aqr Managed is expected to generate 2.24 times less return on investment than American Funds. In addition to that, Aqr Managed is 1.05 times more volatile than American Funds Growth. It trades about 0.06 of its total potential returns per unit of risk. American Funds Growth is currently generating about 0.14 per unit of volatility. If you would invest 2,665 in American Funds Growth on August 29, 2024 and sell it today you would earn a total of 70.00 from holding American Funds Growth or generate 2.63% 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. American Funds Growth
Performance |
| Timeline |
| Aqr Managed Futures |
| American Funds Growth |
Aqr Managed and American Funds Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aqr Managed and American Funds
The main advantage of trading using opposite Aqr Managed and American Funds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aqr Managed position performs unexpectedly, American Funds 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 American Funds will offset losses from the drop in American Funds' long position.| Aqr Managed vs. Pimco Trends Managed | Aqr Managed vs. Pimco Trends Managed | Aqr Managed vs. HUMANA INC | Aqr Managed vs. Aquagold International |
| American Funds vs. Blackrock Inflation Protected | American Funds vs. Aqr Managed Futures | American Funds vs. The Hartford Inflation | American Funds vs. The Hartford Inflation |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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