Correlation Between Aqr Equity and Barings Emerging
Can any of the company-specific risk be diversified away by investing in both Aqr Equity and Barings Emerging 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 Equity and Barings Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aqr Equity Market and Barings Emerging Markets, you can compare the effects of market volatilities on Aqr Equity and Barings Emerging 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 Equity with a short position of Barings Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aqr Equity and Barings Emerging.
Diversification Opportunities for Aqr Equity and Barings Emerging
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Aqr and Barings is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Aqr Equity Market and Barings Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Barings Emerging Markets and Aqr Equity 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 Equity Market are associated (or correlated) with Barings Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Barings Emerging Markets has no effect on the direction of Aqr Equity i.e., Aqr Equity and Barings Emerging go up and down completely randomly.
Pair Corralation between Aqr Equity and Barings Emerging
Assuming the 90 days horizon Aqr Equity Market is expected to generate 1.22 times more return on investment than Barings Emerging. However, Aqr Equity is 1.22 times more volatile than Barings Emerging Markets. It trades about 0.18 of its potential returns per unit of risk. Barings Emerging Markets is currently generating about 0.07 per unit of risk. If you would invest 705.00 in Aqr Equity Market on November 8, 2024 and sell it today you would earn a total of 338.00 from holding Aqr Equity Market or generate 47.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aqr Equity Market vs. Barings Emerging Markets
Performance |
| Timeline |
| Aqr Equity Market |
| Barings Emerging Markets |
Aqr Equity and Barings Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aqr Equity and Barings Emerging
The main advantage of trading using opposite Aqr Equity and Barings Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aqr Equity position performs unexpectedly, Barings Emerging 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 Barings Emerging will offset losses from the drop in Barings Emerging's long position.| Aqr Equity vs. Aqr Large Cap | Aqr Equity vs. Aqr Large Cap | Aqr Equity vs. Aqr International Defensive | Aqr Equity vs. Aqr International Defensive |
| Barings Emerging vs. Voya Government Money | Barings Emerging vs. Vanguard Money Market | Barings Emerging vs. Aig Government Money | Barings Emerging vs. Money Market Obligations |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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