Correlation Between Aqr Managed and Oakmark International
Can any of the company-specific risk be diversified away by investing in both Aqr Managed and Oakmark International 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 Oakmark International 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 Oakmark International Fund, you can compare the effects of market volatilities on Aqr Managed and Oakmark International 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 Oakmark International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aqr Managed and Oakmark International.
Diversification Opportunities for Aqr Managed and Oakmark International
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between AQR and Oakmark is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Aqr Managed Futures and Oakmark International Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oakmark International 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 Oakmark International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oakmark International has no effect on the direction of Aqr Managed i.e., Aqr Managed and Oakmark International go up and down completely randomly.
Pair Corralation between Aqr Managed and Oakmark International
Assuming the 90 days horizon Aqr Managed Futures is expected to generate 0.97 times more return on investment than Oakmark International. However, Aqr Managed Futures is 1.04 times less risky than Oakmark International. It trades about 0.06 of its potential returns per unit of risk. Oakmark International Fund is currently generating about 0.03 per unit of risk. If you would invest 699.00 in Aqr Managed Futures on November 27, 2024 and sell it today you would earn a total of 170.00 from holding Aqr Managed Futures or generate 24.32% 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. Oakmark International Fund
Performance |
| Timeline |
| Aqr Managed Futures |
| Oakmark International |
Aqr Managed and Oakmark International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aqr Managed and Oakmark International
The main advantage of trading using opposite Aqr Managed and Oakmark International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aqr Managed position performs unexpectedly, Oakmark International 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 Oakmark International will offset losses from the drop in Oakmark International's long position.| Aqr Managed vs. Wells Fargo Advantage | Aqr Managed vs. Gold And Precious | Aqr Managed vs. Investment Managers Series | Aqr Managed vs. Global Gold Fund |
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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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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