Correlation Between Aqr Managed and Northern Small
Can any of the company-specific risk be diversified away by investing in both Aqr Managed and Northern Small 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 Northern Small 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 Northern Small Cap, you can compare the effects of market volatilities on Aqr Managed and Northern Small 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 Northern Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aqr Managed and Northern Small.
Diversification Opportunities for Aqr Managed and Northern Small
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Aqr and Northern is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Aqr Managed Futures and Northern Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Northern Small Cap 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 Northern Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Northern Small Cap has no effect on the direction of Aqr Managed i.e., Aqr Managed and Northern Small go up and down completely randomly.
Pair Corralation between Aqr Managed and Northern Small
Assuming the 90 days horizon Aqr Managed is expected to generate 2.93 times less return on investment than Northern Small. But when comparing it to its historical volatility, Aqr Managed Futures is 1.93 times less risky than Northern Small. It trades about 0.17 of its potential returns per unit of risk. Northern Small Cap is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 2,988 in Northern Small Cap on September 3, 2024 and sell it today you would earn a total of 259.00 from holding Northern Small Cap or generate 8.67% 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. Northern Small Cap
Performance |
| Timeline |
| Aqr Managed Futures |
| Northern Small Cap |
Aqr Managed and Northern Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aqr Managed and Northern Small
The main advantage of trading using opposite Aqr Managed and Northern Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aqr Managed position performs unexpectedly, Northern Small 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 Northern Small will offset losses from the drop in Northern Small's long position.| Aqr Managed vs. The Hartford Equity | Aqr Managed vs. Locorr Dynamic Equity | Aqr Managed vs. Jpmorgan Equity Income | Aqr Managed vs. Multimedia Portfolio Multimedia |
| Northern Small vs. Leggmason Partners Institutional | Northern Small vs. Volumetric Fund Volumetric | Northern Small vs. Ab Value Fund | Northern Small vs. Abr 7525 Volatility |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
Other Complementary Tools
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments |