Correlation Between Aqr Managed and Cref Inflation-linked
Can any of the company-specific risk be diversified away by investing in both Aqr Managed and Cref Inflation-linked 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 Cref Inflation-linked 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 Cref Inflation Linked Bond, you can compare the effects of market volatilities on Aqr Managed and Cref Inflation-linked 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 Cref Inflation-linked. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aqr Managed and Cref Inflation-linked.
Diversification Opportunities for Aqr Managed and Cref Inflation-linked
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Aqr and Cref is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Aqr Managed Futures and Cref Inflation Linked Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cref Inflation Linked 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 Cref Inflation-linked. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cref Inflation Linked has no effect on the direction of Aqr Managed i.e., Aqr Managed and Cref Inflation-linked go up and down completely randomly.
Pair Corralation between Aqr Managed and Cref Inflation-linked
Assuming the 90 days horizon Aqr Managed Futures is expected to under-perform the Cref Inflation-linked. In addition to that, Aqr Managed is 5.71 times more volatile than Cref Inflation Linked Bond. It trades about -0.01 of its total potential returns per unit of risk. Cref Inflation Linked Bond is currently generating about 0.24 per unit of volatility. If you would invest 8,492 in Cref Inflation Linked Bond on November 2, 2024 and sell it today you would earn a total of 72.00 from holding Cref Inflation Linked Bond or generate 0.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aqr Managed Futures vs. Cref Inflation Linked Bond
Performance |
| Timeline |
| Aqr Managed Futures |
| Cref Inflation Linked |
Aqr Managed and Cref Inflation-linked Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aqr Managed and Cref Inflation-linked
The main advantage of trading using opposite Aqr Managed and Cref Inflation-linked positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aqr Managed position performs unexpectedly, Cref Inflation-linked 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 Cref Inflation-linked will offset losses from the drop in Cref Inflation-linked's long position.| Aqr Managed vs. Blackrock Moderate Prepared | Aqr Managed vs. Blackrock Retirement Income | Aqr Managed vs. Retirement Living Through | Aqr Managed vs. College Retirement Equities |
| Cref Inflation-linked vs. Tax Managed International Equity | Cref Inflation-linked vs. Dws Equity Sector | Cref Inflation-linked vs. T Rowe Price | Cref Inflation-linked vs. Locorr Dynamic 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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