Correlation Between Aqr Managed and Federated Mdt
Can any of the company-specific risk be diversified away by investing in both Aqr Managed and Federated Mdt 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 Federated Mdt 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 Federated Mdt Mid Cap, you can compare the effects of market volatilities on Aqr Managed and Federated Mdt 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 Federated Mdt. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aqr Managed and Federated Mdt.
Diversification Opportunities for Aqr Managed and Federated Mdt
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Aqr and Federated is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Aqr Managed Futures and Federated Mdt Mid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated Mdt Mid 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 Federated Mdt. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federated Mdt Mid has no effect on the direction of Aqr Managed i.e., Aqr Managed and Federated Mdt go up and down completely randomly.
Pair Corralation between Aqr Managed and Federated Mdt
Assuming the 90 days horizon Aqr Managed Futures is expected to under-perform the Federated Mdt. But the mutual fund apears to be less risky and, when comparing its historical volatility, Aqr Managed Futures is 1.3 times less risky than Federated Mdt. The mutual fund trades about -0.04 of its potential returns per unit of risk. The Federated Mdt Mid Cap is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 4,963 in Federated Mdt Mid Cap on September 12, 2024 and sell it today you would earn a total of 1,127 from holding Federated Mdt Mid Cap or generate 22.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.2% |
| Values | Daily Returns |
Aqr Managed Futures vs. Federated Mdt Mid Cap
Performance |
| Timeline |
| Aqr Managed Futures |
| Federated Mdt Mid |
Aqr Managed and Federated Mdt Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aqr Managed and Federated Mdt
The main advantage of trading using opposite Aqr Managed and Federated Mdt positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aqr Managed position performs unexpectedly, Federated Mdt 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 Federated Mdt will offset losses from the drop in Federated Mdt's long position.| Aqr Managed vs. Pimco Trends Managed | Aqr Managed vs. Pimco Trends Managed | Aqr Managed vs. SCOR PK | Aqr Managed vs. Morningstar Unconstrained Allocation |
| Federated Mdt vs. Aqr Managed Futures | Federated Mdt vs. Blackrock Inflation Protected | Federated Mdt vs. Deutsche Global Inflation | Federated Mdt vs. Short Duration 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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