Correlation Between Aqr Sustainable and Bbh Intermediate
Can any of the company-specific risk be diversified away by investing in both Aqr Sustainable and Bbh Intermediate 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 Bbh Intermediate 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 Bbh Intermediate Municipal, you can compare the effects of market volatilities on Aqr Sustainable and Bbh Intermediate 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 Bbh Intermediate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aqr Sustainable and Bbh Intermediate.
Diversification Opportunities for Aqr Sustainable and Bbh Intermediate
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Aqr and Bbh is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Aqr Sustainable Long Short and Bbh Intermediate Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bbh Intermediate Mun 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 Bbh Intermediate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bbh Intermediate Mun has no effect on the direction of Aqr Sustainable i.e., Aqr Sustainable and Bbh Intermediate go up and down completely randomly.
Pair Corralation between Aqr Sustainable and Bbh Intermediate
Assuming the 90 days horizon Aqr Sustainable Long Short is expected to generate 4.18 times more return on investment than Bbh Intermediate. However, Aqr Sustainable is 4.18 times more volatile than Bbh Intermediate Municipal. It trades about 0.09 of its potential returns per unit of risk. Bbh Intermediate Municipal is currently generating about 0.14 per unit of risk. If you would invest 1,378 in Aqr Sustainable Long Short on September 2, 2024 and sell it today you would earn a total of 118.00 from holding Aqr Sustainable Long Short or generate 8.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aqr Sustainable Long Short vs. Bbh Intermediate Municipal
Performance |
| Timeline |
| Aqr Sustainable Long |
| Bbh Intermediate Mun |
Aqr Sustainable and Bbh Intermediate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aqr Sustainable and Bbh Intermediate
The main advantage of trading using opposite Aqr Sustainable and Bbh Intermediate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aqr Sustainable position performs unexpectedly, Bbh Intermediate 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 Bbh Intermediate will offset losses from the drop in Bbh Intermediate'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 |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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