Correlation Between Aqr Managed and Transamerica Intermediate
Can any of the company-specific risk be diversified away by investing in both Aqr Managed and Transamerica Intermediate 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 Transamerica Intermediate 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 Transamerica Intermediate Bond, you can compare the effects of market volatilities on Aqr Managed and Transamerica Intermediate 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 Transamerica Intermediate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aqr Managed and Transamerica Intermediate.
Diversification Opportunities for Aqr Managed and Transamerica Intermediate
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between AQR and Transamerica is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Aqr Managed Futures and Transamerica Intermediate Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Transamerica Intermediate 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 Transamerica Intermediate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Transamerica Intermediate has no effect on the direction of Aqr Managed i.e., Aqr Managed and Transamerica Intermediate go up and down completely randomly.
Pair Corralation between Aqr Managed and Transamerica Intermediate
Assuming the 90 days horizon Aqr Managed Futures is expected to generate 3.3 times more return on investment than Transamerica Intermediate. However, Aqr Managed is 3.3 times more volatile than Transamerica Intermediate Bond. It trades about 0.26 of its potential returns per unit of risk. Transamerica Intermediate Bond is currently generating about 0.26 per unit of risk. If you would invest 838.00 in Aqr Managed Futures on December 1, 2024 and sell it today you would earn a total of 45.00 from holding Aqr Managed Futures or generate 5.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aqr Managed Futures vs. Transamerica Intermediate Bond
Performance |
| Timeline |
| Aqr Managed Futures |
| Transamerica Intermediate |
Aqr Managed and Transamerica Intermediate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aqr Managed and Transamerica Intermediate
The main advantage of trading using opposite Aqr Managed and Transamerica Intermediate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aqr Managed position performs unexpectedly, Transamerica Intermediate 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 Transamerica Intermediate will offset losses from the drop in Transamerica Intermediate's long position.| Aqr Managed vs. Virtus High Yield | Aqr Managed vs. Gmo High Yield | Aqr Managed vs. Artisan High Income | Aqr Managed vs. Alpine High Yield |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
Other Complementary Tools
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets |