Correlation Between Aqr Style and Fs Multi
Can any of the company-specific risk be diversified away by investing in both Aqr Style and Fs Multi 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 Style and Fs Multi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aqr Style Premia and Fs Multi Strategy Alt, you can compare the effects of market volatilities on Aqr Style and Fs Multi 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 Style with a short position of Fs Multi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aqr Style and Fs Multi.
Diversification Opportunities for Aqr Style and Fs Multi
Poor diversification
The 3 months correlation between Aqr and FSMSX is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Aqr Style Premia and Fs Multi Strategy Alt in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fs Multi Strategy and Aqr Style 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 Style Premia are associated (or correlated) with Fs Multi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fs Multi Strategy has no effect on the direction of Aqr Style i.e., Aqr Style and Fs Multi go up and down completely randomly.
Pair Corralation between Aqr Style and Fs Multi
Assuming the 90 days horizon Aqr Style is expected to generate 7.41 times less return on investment than Fs Multi. In addition to that, Aqr Style is 3.95 times more volatile than Fs Multi Strategy Alt. It trades about 0.01 of its total potential returns per unit of risk. Fs Multi Strategy Alt is currently generating about 0.33 per unit of volatility. If you would invest 1,130 in Fs Multi Strategy Alt on September 13, 2024 and sell it today you would earn a total of 15.00 from holding Fs Multi Strategy Alt or generate 1.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aqr Style Premia vs. Fs Multi Strategy Alt
Performance |
| Timeline |
| Aqr Style Premia |
| Fs Multi Strategy |
Aqr Style and Fs Multi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aqr Style and Fs Multi
The main advantage of trading using opposite Aqr Style and Fs Multi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aqr Style position performs unexpectedly, Fs Multi 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 Fs Multi will offset losses from the drop in Fs Multi's long position.| Aqr Style vs. Eventide Healthcare Life | Aqr Style vs. Fidelity Advisor Health | Aqr Style vs. Alger Health Sciences | Aqr Style vs. Baillie Gifford Health |
| Fs Multi vs. Vy Jpmorgan Emerging | Fs Multi vs. Black Oak Emerging | Fs Multi vs. Rbc Emerging Markets | Fs Multi vs. Origin Emerging Markets |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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