Correlation Between Aqr Sustainable and Transamerica Financial
Can any of the company-specific risk be diversified away by investing in both Aqr Sustainable and Transamerica Financial 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 Transamerica Financial 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 Transamerica Financial Life, you can compare the effects of market volatilities on Aqr Sustainable and Transamerica Financial 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 Transamerica Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aqr Sustainable and Transamerica Financial.
Diversification Opportunities for Aqr Sustainable and Transamerica Financial
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Aqr and Transamerica is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Aqr Sustainable Long Short and Transamerica Financial Life in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Transamerica Financial 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 Transamerica Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Transamerica Financial has no effect on the direction of Aqr Sustainable i.e., Aqr Sustainable and Transamerica Financial go up and down completely randomly.
Pair Corralation between Aqr Sustainable and Transamerica Financial
Assuming the 90 days horizon Aqr Sustainable Long Short is expected to generate 0.7 times more return on investment than Transamerica Financial. However, Aqr Sustainable Long Short is 1.42 times less risky than Transamerica Financial. It trades about 0.15 of its potential returns per unit of risk. Transamerica Financial Life is currently generating about 0.01 per unit of risk. If you would invest 835.00 in Aqr Sustainable Long Short on November 6, 2024 and sell it today you would earn a total of 509.00 from holding Aqr Sustainable Long Short or generate 60.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aqr Sustainable Long Short vs. Transamerica Financial Life
Performance |
| Timeline |
| Aqr Sustainable Long |
| Transamerica Financial |
Aqr Sustainable and Transamerica Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aqr Sustainable and Transamerica Financial
The main advantage of trading using opposite Aqr Sustainable and Transamerica Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aqr Sustainable position performs unexpectedly, Transamerica Financial 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 Transamerica Financial will offset losses from the drop in Transamerica Financial's long position.| Aqr Sustainable vs. Aig Government Money | Aqr Sustainable vs. Putnam Money Market | Aqr Sustainable vs. Blackstone Secured Lending | Aqr Sustainable vs. John Hancock Money |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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