Correlation Between Aqr Managed and Short Precious
Can any of the company-specific risk be diversified away by investing in both Aqr Managed and Short Precious 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 Short Precious 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 Short Precious Metals, you can compare the effects of market volatilities on Aqr Managed and Short Precious 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 Short Precious. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aqr Managed and Short Precious.
Diversification Opportunities for Aqr Managed and Short Precious
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Aqr and Short is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Aqr Managed Futures and Short Precious Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Short Precious Metals 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 Short Precious. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Short Precious Metals has no effect on the direction of Aqr Managed i.e., Aqr Managed and Short Precious go up and down completely randomly.
Pair Corralation between Aqr Managed and Short Precious
Assuming the 90 days horizon Aqr Managed Futures is expected to generate 0.49 times more return on investment than Short Precious. However, Aqr Managed Futures is 2.02 times less risky than Short Precious. It trades about 0.04 of its potential returns per unit of risk. Short Precious Metals is currently generating about 0.0 per unit of risk. If you would invest 715.00 in Aqr Managed Futures on October 11, 2024 and sell it today you would earn a total of 132.00 from holding Aqr Managed Futures or generate 18.46% 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. Short Precious Metals
Performance |
| Timeline |
| Aqr Managed Futures |
| Short Precious Metals |
Aqr Managed and Short Precious Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aqr Managed and Short Precious
The main advantage of trading using opposite Aqr Managed and Short Precious positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aqr Managed position performs unexpectedly, Short Precious 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 Short Precious will offset losses from the drop in Short Precious' long position.| Aqr Managed vs. Columbia Convertible Securities | Aqr Managed vs. Franklin Vertible Securities | Aqr Managed vs. Victory Incore Investment | Aqr Managed vs. Allianzgi Convertible Income |
| Short Precious vs. Aqr Managed Futures | Short Precious vs. Short Duration Inflation | Short Precious vs. Ab Bond Inflation | Short Precious vs. Atac Inflation Rotation |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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