Correlation Between Aqr Equity and Americafirst Large
Can any of the company-specific risk be diversified away by investing in both Aqr Equity and Americafirst Large 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 Americafirst Large 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 Americafirst Large Cap, you can compare the effects of market volatilities on Aqr Equity and Americafirst Large 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 Americafirst Large. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aqr Equity and Americafirst Large.
Diversification Opportunities for Aqr Equity and Americafirst Large
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between AQR and Americafirst is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Aqr Equity Market and Americafirst Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Americafirst Large Cap 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 Americafirst Large. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Americafirst Large Cap has no effect on the direction of Aqr Equity i.e., Aqr Equity and Americafirst Large go up and down completely randomly.
Pair Corralation between Aqr Equity and Americafirst Large
Assuming the 90 days horizon Aqr Equity Market is expected to generate 0.52 times more return on investment than Americafirst Large. However, Aqr Equity Market is 1.92 times less risky than Americafirst Large. It trades about 0.18 of its potential returns per unit of risk. Americafirst Large Cap is currently generating about 0.07 per unit of risk. If you would invest 686.00 in Aqr Equity Market on August 24, 2024 and sell it today you would earn a total of 352.00 from holding Aqr Equity Market or generate 51.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aqr Equity Market vs. Americafirst Large Cap
Performance |
| Timeline |
| Aqr Equity Market |
| Americafirst Large Cap |
Aqr Equity and Americafirst Large Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aqr Equity and Americafirst Large
The main advantage of trading using opposite Aqr Equity and Americafirst Large positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aqr Equity position performs unexpectedly, Americafirst Large 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 Americafirst Large will offset losses from the drop in Americafirst Large's long position.| Aqr Equity vs. Blackrock Global Long | Aqr Equity vs. Blackrock Global Lng | Aqr Equity vs. Blackrock Gbl Lng | Aqr Equity vs. Blackrock Global Longshort |
| Americafirst Large vs. Aqr Equity Market | Americafirst Large vs. Rbc Emerging Markets | Americafirst Large vs. Pace International Emerging | Americafirst Large vs. Ep Emerging Markets |
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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