Correlation Between Aqr Managed and High Yield
Can any of the company-specific risk be diversified away by investing in both Aqr Managed and High Yield 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 High Yield 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 High Yield Fund, you can compare the effects of market volatilities on Aqr Managed and High Yield 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 High Yield. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aqr Managed and High Yield.
Diversification Opportunities for Aqr Managed and High Yield
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Aqr and High is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Aqr Managed Futures and High Yield Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on High Yield Fund 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 High Yield. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of High Yield Fund has no effect on the direction of Aqr Managed i.e., Aqr Managed and High Yield go up and down completely randomly.
Pair Corralation between Aqr Managed and High Yield
Assuming the 90 days horizon Aqr Managed is expected to generate 2.5 times less return on investment than High Yield. In addition to that, Aqr Managed is 3.94 times more volatile than High Yield Fund. It trades about 0.02 of its total potential returns per unit of risk. High Yield Fund is currently generating about 0.17 per unit of volatility. If you would invest 738.00 in High Yield Fund on September 4, 2024 and sell it today you would earn a total of 72.00 from holding High Yield Fund or generate 9.76% 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. High Yield Fund
Performance |
| Timeline |
| Aqr Managed Futures |
| High Yield Fund |
Aqr Managed and High Yield Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aqr Managed and High Yield
The main advantage of trading using opposite Aqr Managed and High Yield positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aqr Managed position performs unexpectedly, High Yield 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 High Yield will offset losses from the drop in High Yield's long position.| Aqr Managed vs. T Rowe Price | Aqr Managed vs. Falcon Focus Scv | Aqr Managed vs. Iaadx | Aqr Managed vs. Leggmason Partners Institutional |
| High Yield vs. Fidelity Sai Inflationfocused | High Yield vs. Goldman Sachs Managed | High Yield vs. Lord Abbett Inflation | High Yield vs. Aqr 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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