Correlation Between Aqr Managed and Prudential Jennison
Can any of the company-specific risk be diversified away by investing in both Aqr Managed and Prudential Jennison 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 Prudential Jennison 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 Prudential Jennison Mid Cap, you can compare the effects of market volatilities on Aqr Managed and Prudential Jennison 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 Prudential Jennison. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aqr Managed and Prudential Jennison.
Diversification Opportunities for Aqr Managed and Prudential Jennison
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Aqr and Prudential is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Aqr Managed Futures and Prudential Jennison Mid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prudential Jennison Mid 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 Prudential Jennison. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prudential Jennison Mid has no effect on the direction of Aqr Managed i.e., Aqr Managed and Prudential Jennison go up and down completely randomly.
Pair Corralation between Aqr Managed and Prudential Jennison
Assuming the 90 days horizon Aqr Managed is expected to generate 3.2 times less return on investment than Prudential Jennison. But when comparing it to its historical volatility, Aqr Managed Futures is 1.05 times less risky than Prudential Jennison. It trades about 0.03 of its potential returns per unit of risk. Prudential Jennison Mid Cap is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 1,411 in Prudential Jennison Mid Cap on September 3, 2024 and sell it today you would earn a total of 300.00 from holding Prudential Jennison Mid Cap or generate 21.26% 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. Prudential Jennison Mid Cap
Performance |
| Timeline |
| Aqr Managed Futures |
| Prudential Jennison Mid |
Aqr Managed and Prudential Jennison Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aqr Managed and Prudential Jennison
The main advantage of trading using opposite Aqr Managed and Prudential Jennison positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aqr Managed position performs unexpectedly, Prudential Jennison 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 Prudential Jennison will offset losses from the drop in Prudential Jennison's long position.| Aqr Managed vs. Siit Global Managed | Aqr Managed vs. Artisan Global Unconstrained | Aqr Managed vs. Barings Global Floating | Aqr Managed vs. Alliancebernstein Global High |
| Prudential Jennison vs. Goldman Sachs High | Prudential Jennison vs. Artisan High Income | Prudential Jennison vs. Needham Aggressive Growth | Prudential Jennison vs. Morningstar Aggressive Growth |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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