Correlation Between Aqr Managed and Regional Bank
Can any of the company-specific risk be diversified away by investing in both Aqr Managed and Regional Bank 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 Regional Bank 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 Regional Bank Fund, you can compare the effects of market volatilities on Aqr Managed and Regional Bank 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 Regional Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aqr Managed and Regional Bank.
Diversification Opportunities for Aqr Managed and Regional Bank
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Aqr and Regional is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Aqr Managed Futures and Regional Bank Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Regional Bank 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 Regional Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Regional Bank has no effect on the direction of Aqr Managed i.e., Aqr Managed and Regional Bank go up and down completely randomly.
Pair Corralation between Aqr Managed and Regional Bank
Assuming the 90 days horizon Aqr Managed Futures is expected to generate 1.1 times more return on investment than Regional Bank. However, Aqr Managed is 1.1 times more volatile than Regional Bank Fund. It trades about 0.18 of its potential returns per unit of risk. Regional Bank Fund is currently generating about -0.05 per unit of risk. If you would invest 812.00 in Aqr Managed Futures on September 13, 2024 and sell it today you would earn a total of 26.00 from holding Aqr Managed Futures or generate 3.2% 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. Regional Bank Fund
Performance |
| Timeline |
| Aqr Managed Futures |
| Regional Bank |
Aqr Managed and Regional Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aqr Managed and Regional Bank
The main advantage of trading using opposite Aqr Managed and Regional Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aqr Managed position performs unexpectedly, Regional Bank 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 Regional Bank will offset losses from the drop in Regional Bank's long position.| Aqr Managed vs. Ab Discovery Value | Aqr Managed vs. Heartland Value Plus | Aqr Managed vs. Ab Small Cap | Aqr Managed vs. Fpa Queens Road |
| Regional Bank vs. Rbc Microcap Value | Regional Bank vs. Rbb Fund | Regional Bank vs. Leggmason Partners Institutional | Regional Bank vs. Arrow Managed Futures |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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