Correlation Between Aqr Sustainable and Ab Select
Can any of the company-specific risk be diversified away by investing in both Aqr Sustainable and Ab Select 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 Sustainable and Ab Select into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aqr Sustainable Long Short and Ab Select Longshort, you can compare the effects of market volatilities on Aqr Sustainable and Ab Select 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 Sustainable with a short position of Ab Select. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aqr Sustainable and Ab Select.
Diversification Opportunities for Aqr Sustainable and Ab Select
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between AQR and ASCLX is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Aqr Sustainable Long Short and Ab Select Longshort in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ab Select Longshort and Aqr Sustainable 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 Sustainable Long Short are associated (or correlated) with Ab Select. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ab Select Longshort has no effect on the direction of Aqr Sustainable i.e., Aqr Sustainable and Ab Select go up and down completely randomly.
Pair Corralation between Aqr Sustainable and Ab Select
Assuming the 90 days horizon Aqr Sustainable Long Short is expected to generate 3.47 times more return on investment than Ab Select. However, Aqr Sustainable is 3.47 times more volatile than Ab Select Longshort. It trades about 0.08 of its potential returns per unit of risk. Ab Select Longshort is currently generating about 0.14 per unit of risk. If you would invest 975.00 in Aqr Sustainable Long Short on August 31, 2024 and sell it today you would earn a total of 518.00 from holding Aqr Sustainable Long Short or generate 53.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.73% |
| Values | Daily Returns |
Aqr Sustainable Long Short vs. Ab Select Longshort
Performance |
| Timeline |
| Aqr Sustainable Long |
| Ab Select Longshort |
Aqr Sustainable and Ab Select Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aqr Sustainable and Ab Select
The main advantage of trading using opposite Aqr Sustainable and Ab Select positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aqr Sustainable position performs unexpectedly, Ab Select 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 Ab Select will offset losses from the drop in Ab Select's long position.| Aqr Sustainable vs. Aqr Long Short Equity | Aqr Sustainable vs. Diamond Hill Long Short | Aqr Sustainable vs. Diamond Hill Long Short | Aqr Sustainable vs. Diamond Hill Long Short |
| Ab Select vs. Small Cap Stock | Ab Select vs. Pgim Jennison Diversified | Ab Select vs. Jhancock Diversified Macro | Ab Select vs. Oppenheimer International Diversified |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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