Correlation Between Aqr Small and Templeton Emerging
Can any of the company-specific risk be diversified away by investing in both Aqr Small and Templeton Emerging 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 Small and Templeton Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aqr Small Cap and Templeton Emerging Markets, you can compare the effects of market volatilities on Aqr Small and Templeton Emerging 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 Small with a short position of Templeton Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aqr Small and Templeton Emerging.
Diversification Opportunities for Aqr Small and Templeton Emerging
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Aqr and Templeton is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Aqr Small Cap and Templeton Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Templeton Emerging and Aqr Small 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 Small Cap are associated (or correlated) with Templeton Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Templeton Emerging has no effect on the direction of Aqr Small i.e., Aqr Small and Templeton Emerging go up and down completely randomly.
Pair Corralation between Aqr Small and Templeton Emerging
Assuming the 90 days horizon Aqr Small Cap is expected to under-perform the Templeton Emerging. In addition to that, Aqr Small is 2.33 times more volatile than Templeton Emerging Markets. It trades about -0.02 of its total potential returns per unit of risk. Templeton Emerging Markets is currently generating about 0.23 per unit of volatility. If you would invest 1,366 in Templeton Emerging Markets on September 13, 2024 and sell it today you would earn a total of 27.00 from holding Templeton Emerging Markets or generate 1.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Aqr Small Cap vs. Templeton Emerging Markets
Performance |
| Timeline |
| Aqr Small Cap |
| Templeton Emerging |
Aqr Small and Templeton Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aqr Small and Templeton Emerging
The main advantage of trading using opposite Aqr Small and Templeton Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aqr Small position performs unexpectedly, Templeton Emerging 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 Templeton Emerging will offset losses from the drop in Templeton Emerging's long position.| Aqr Small vs. Hennessy Bp Energy | Aqr Small vs. Gmo Resources | Aqr Small vs. Alpsalerian Energy Infrastructure | Aqr Small vs. Icon Natural Resources |
| Templeton Emerging vs. Franklin Mutual Beacon | Templeton Emerging vs. Templeton Developing Markets | Templeton Emerging vs. Franklin Mutual Global | Templeton Emerging vs. Franklin Mutual Global |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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