Correlation Between Aqr Sustainable and Franklin Convertible
Can any of the company-specific risk be diversified away by investing in both Aqr Sustainable and Franklin Convertible 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 Franklin Convertible 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 Franklin Vertible Securities, you can compare the effects of market volatilities on Aqr Sustainable and Franklin Convertible 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 Franklin Convertible. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aqr Sustainable and Franklin Convertible.
Diversification Opportunities for Aqr Sustainable and Franklin Convertible
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Aqr and Franklin is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Aqr Sustainable Long Short and Franklin Vertible Securities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Convertible 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 Franklin Convertible. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Convertible has no effect on the direction of Aqr Sustainable i.e., Aqr Sustainable and Franklin Convertible go up and down completely randomly.
Pair Corralation between Aqr Sustainable and Franklin Convertible
Assuming the 90 days horizon Aqr Sustainable Long Short is expected to generate 1.19 times more return on investment than Franklin Convertible. However, Aqr Sustainable is 1.19 times more volatile than Franklin Vertible Securities. It trades about 0.16 of its potential returns per unit of risk. Franklin Vertible Securities is currently generating about 0.06 per unit of risk. If you would invest 808.00 in Aqr Sustainable Long Short on October 13, 2024 and sell it today you would earn a total of 524.00 from holding Aqr Sustainable Long Short or generate 64.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Aqr Sustainable Long Short vs. Franklin Vertible Securities
Performance |
| Timeline |
| Aqr Sustainable Long |
| Franklin Convertible |
Aqr Sustainable and Franklin Convertible Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aqr Sustainable and Franklin Convertible
The main advantage of trading using opposite Aqr Sustainable and Franklin Convertible positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aqr Sustainable position performs unexpectedly, Franklin Convertible 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 Franklin Convertible will offset losses from the drop in Franklin Convertible's long position.| Aqr Sustainable vs. Aqr Large Cap | Aqr Sustainable vs. Aqr Large Cap | Aqr Sustainable vs. Aqr International Defensive | Aqr Sustainable vs. Aqr International Defensive |
| Franklin Convertible vs. Alphacentric Hedged Market | Franklin Convertible vs. T Rowe Price | Franklin Convertible vs. Aqr Sustainable Long Short | Franklin Convertible vs. Artisan Developing World |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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