Correlation Between Aqr Sustainable and Steward Large
Can any of the company-specific risk be diversified away by investing in both Aqr Sustainable and Steward Large 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 Steward Large 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 Steward Large Cap, you can compare the effects of market volatilities on Aqr Sustainable and Steward Large 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 Steward Large. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aqr Sustainable and Steward Large.
Diversification Opportunities for Aqr Sustainable and Steward Large
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between AQR and Steward is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Aqr Sustainable Long Short and Steward Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Steward Large Cap 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 Steward Large. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Steward Large Cap has no effect on the direction of Aqr Sustainable i.e., Aqr Sustainable and Steward Large go up and down completely randomly.
Pair Corralation between Aqr Sustainable and Steward Large
Assuming the 90 days horizon Aqr Sustainable Long Short is expected to generate 0.75 times more return on investment than Steward Large. However, Aqr Sustainable Long Short is 1.33 times less risky than Steward Large. It trades about 0.08 of its potential returns per unit of risk. Steward Large Cap is currently generating about 0.0 per unit of risk. If you would invest 907.00 in Aqr Sustainable Long Short on September 1, 2024 and sell it today you would earn a total of 586.00 from holding Aqr Sustainable Long Short or generate 64.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.8% |
| Values | Daily Returns |
Aqr Sustainable Long Short vs. Steward Large Cap
Performance |
| Timeline |
| Aqr Sustainable Long |
| Steward Large Cap |
Aqr Sustainable and Steward Large Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aqr Sustainable and Steward Large
The main advantage of trading using opposite Aqr Sustainable and Steward Large positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aqr Sustainable position performs unexpectedly, Steward Large 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 Steward Large will offset losses from the drop in Steward Large'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 |
| Steward Large vs. Pnc Emerging Markets | Steward Large vs. Rbc Emerging Markets | Steward Large vs. Siit Emerging Markets | Steward Large vs. Aqr Sustainable Long Short |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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