Correlation Between Aqr Managed and Plumb Equity
Can any of the company-specific risk be diversified away by investing in both Aqr Managed and Plumb Equity 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 Plumb Equity 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 Plumb Equity, you can compare the effects of market volatilities on Aqr Managed and Plumb Equity 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 Plumb Equity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aqr Managed and Plumb Equity.
Diversification Opportunities for Aqr Managed and Plumb Equity
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Aqr and Plumb is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Aqr Managed Futures and Plumb Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Plumb Equity 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 Plumb Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Plumb Equity has no effect on the direction of Aqr Managed i.e., Aqr Managed and Plumb Equity go up and down completely randomly.
Pair Corralation between Aqr Managed and Plumb Equity
Assuming the 90 days horizon Aqr Managed is expected to generate 2.39 times less return on investment than Plumb Equity. But when comparing it to its historical volatility, Aqr Managed Futures is 1.19 times less risky than Plumb Equity. It trades about 0.04 of its potential returns per unit of risk. Plumb Equity is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 2,567 in Plumb Equity on September 14, 2024 and sell it today you would earn a total of 629.00 from holding Plumb Equity or generate 24.5% 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. Plumb Equity
Performance |
| Timeline |
| Aqr Managed Futures |
| Plumb Equity |
Aqr Managed and Plumb Equity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aqr Managed and Plumb Equity
The main advantage of trading using opposite Aqr Managed and Plumb Equity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aqr Managed position performs unexpectedly, Plumb Equity 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 Plumb Equity will offset losses from the drop in Plumb Equity's long position.| Aqr Managed vs. Siit Global Managed | Aqr Managed vs. Alliancebernstein Global High | Aqr Managed vs. Scharf Global Opportunity | Aqr Managed vs. Kinetics Global Fund |
| Plumb Equity vs. Plumb Balanced Fund | Plumb Equity vs. Plumb Equity Fund | Plumb Equity vs. Plumb Balanced | Plumb Equity vs. Plumb Equity |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
Other Complementary Tools
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges |