Correlation Between Aqr Managed and Northern Global
Can any of the company-specific risk be diversified away by investing in both Aqr Managed and Northern Global 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 Northern Global 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 Northern Global Sustainability, you can compare the effects of market volatilities on Aqr Managed and Northern Global 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 Northern Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aqr Managed and Northern Global.
Diversification Opportunities for Aqr Managed and Northern Global
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Aqr and Northern is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Aqr Managed Futures and Northern Global Sustainability in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Northern Global Sust 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 Northern Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Northern Global Sust has no effect on the direction of Aqr Managed i.e., Aqr Managed and Northern Global go up and down completely randomly.
Pair Corralation between Aqr Managed and Northern Global
Assuming the 90 days horizon Aqr Managed is expected to generate 1.49 times less return on investment than Northern Global. In addition to that, Aqr Managed is 1.39 times more volatile than Northern Global Sustainability. It trades about 0.16 of its total potential returns per unit of risk. Northern Global Sustainability is currently generating about 0.33 per unit of volatility. If you would invest 2,369 in Northern Global Sustainability on September 1, 2024 and sell it today you would earn a total of 110.00 from holding Northern Global Sustainability or generate 4.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Aqr Managed Futures vs. Northern Global Sustainability
Performance |
| Timeline |
| Aqr Managed Futures |
| Northern Global Sust |
Aqr Managed and Northern Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aqr Managed and Northern Global
The main advantage of trading using opposite Aqr Managed and Northern Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aqr Managed position performs unexpectedly, Northern Global 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 Northern Global will offset losses from the drop in Northern Global's long position.| Aqr Managed vs. Aqr Large Cap | Aqr Managed vs. Aqr Large Cap | Aqr Managed vs. Aqr International Defensive | Aqr Managed vs. Aqr International Defensive |
| Northern Global vs. Ab Bond Inflation | Northern Global vs. Asg Managed Futures | Northern Global vs. Nationwide Inflation Protected Securities | Northern Global 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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