Correlation Between Aqr Sustainable and Arrow Managed
Can any of the company-specific risk be diversified away by investing in both Aqr Sustainable and Arrow Managed 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 Arrow Managed 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 Arrow Managed Futures, you can compare the effects of market volatilities on Aqr Sustainable and Arrow Managed 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 Arrow Managed. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aqr Sustainable and Arrow Managed.
Diversification Opportunities for Aqr Sustainable and Arrow Managed
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Aqr and Arrow is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Aqr Sustainable Long Short and Arrow Managed Futures in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arrow Managed Futures 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 Arrow Managed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arrow Managed Futures has no effect on the direction of Aqr Sustainable i.e., Aqr Sustainable and Arrow Managed go up and down completely randomly.
Pair Corralation between Aqr Sustainable and Arrow Managed
Assuming the 90 days horizon Aqr Sustainable is expected to generate 4.74 times less return on investment than Arrow Managed. But when comparing it to its historical volatility, Aqr Sustainable Long Short is 1.61 times less risky than Arrow Managed. It trades about 0.08 of its potential returns per unit of risk. Arrow Managed Futures is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 561.00 in Arrow Managed Futures on November 3, 2024 and sell it today you would earn a total of 36.00 from holding Arrow Managed Futures or generate 6.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aqr Sustainable Long Short vs. Arrow Managed Futures
Performance |
| Timeline |
| Aqr Sustainable Long |
| Arrow Managed Futures |
Aqr Sustainable and Arrow Managed Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aqr Sustainable and Arrow Managed
The main advantage of trading using opposite Aqr Sustainable and Arrow Managed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aqr Sustainable position performs unexpectedly, Arrow Managed 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 Arrow Managed will offset losses from the drop in Arrow Managed's long position.| Aqr Sustainable vs. Fidelity Advisor Financial | Aqr Sustainable vs. Mesirow Financial Small | Aqr Sustainable vs. Davis Financial Fund | Aqr Sustainable vs. Financial Industries Fund |
| Arrow Managed vs. Gabelli Convertible And | Arrow Managed vs. Rationalpier 88 Convertible | Arrow Managed vs. Advent Claymore Convertible | Arrow Managed vs. Virtus Convertible |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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