Correlation Between Aqr Equity and Valic Company
Can any of the company-specific risk be diversified away by investing in both Aqr Equity and Valic Company 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 Valic Company 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 Valic Company I, you can compare the effects of market volatilities on Aqr Equity and Valic Company 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 Valic Company. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aqr Equity and Valic Company.
Diversification Opportunities for Aqr Equity and Valic Company
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between AQR and Valic is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Aqr Equity Market and Valic Company I in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Valic Company I 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 Valic Company. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Valic Company I has no effect on the direction of Aqr Equity i.e., Aqr Equity and Valic Company go up and down completely randomly.
Pair Corralation between Aqr Equity and Valic Company
Assuming the 90 days horizon Aqr Equity Market is expected to generate 0.79 times more return on investment than Valic Company. However, Aqr Equity Market is 1.26 times less risky than Valic Company. It trades about 0.55 of its potential returns per unit of risk. Valic Company I is currently generating about 0.1 per unit of risk. If you would invest 995.00 in Aqr Equity Market on August 26, 2024 and sell it today you would earn a total of 46.00 from holding Aqr Equity Market or generate 4.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aqr Equity Market vs. Valic Company I
Performance |
| Timeline |
| Aqr Equity Market |
| Valic Company I |
Aqr Equity and Valic Company Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aqr Equity and Valic Company
The main advantage of trading using opposite Aqr Equity and Valic Company positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aqr Equity position performs unexpectedly, Valic Company 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 Valic Company will offset losses from the drop in Valic Company'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 |
| Valic Company vs. Pnc Emerging Markets | Valic Company vs. Aqr Long Short Equity | Valic Company vs. Aqr Equity Market | Valic Company vs. Artisan 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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