Correlation Between Aqr Tm and Touchstone Large
Can any of the company-specific risk be diversified away by investing in both Aqr Tm and Touchstone 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 Tm and Touchstone Large into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aqr Tm Emerging and Touchstone Large Cap, you can compare the effects of market volatilities on Aqr Tm and Touchstone 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 Tm with a short position of Touchstone Large. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aqr Tm and Touchstone Large.
Diversification Opportunities for Aqr Tm and Touchstone Large
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Aqr and Touchstone is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Aqr Tm Emerging and Touchstone Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Touchstone Large Cap and Aqr Tm 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 Tm Emerging are associated (or correlated) with Touchstone Large. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Touchstone Large Cap has no effect on the direction of Aqr Tm i.e., Aqr Tm and Touchstone Large go up and down completely randomly.
Pair Corralation between Aqr Tm and Touchstone Large
Assuming the 90 days horizon Aqr Tm Emerging is expected to under-perform the Touchstone Large. In addition to that, Aqr Tm is 1.24 times more volatile than Touchstone Large Cap. It trades about -0.02 of its total potential returns per unit of risk. Touchstone Large Cap is currently generating about 0.11 per unit of volatility. If you would invest 1,906 in Touchstone Large Cap on October 21, 2024 and sell it today you would earn a total of 25.00 from holding Touchstone Large Cap or generate 1.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aqr Tm Emerging vs. Touchstone Large Cap
Performance |
| Timeline |
| Aqr Tm Emerging |
| Touchstone Large Cap |
Aqr Tm and Touchstone Large Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aqr Tm and Touchstone Large
The main advantage of trading using opposite Aqr Tm and Touchstone Large positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aqr Tm position performs unexpectedly, Touchstone 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 Touchstone Large will offset losses from the drop in Touchstone Large's long position.| Aqr Tm vs. Aqr Large Cap | Aqr Tm vs. Aqr Large Cap | Aqr Tm vs. Aqr International Defensive | Aqr Tm vs. Aqr International Defensive |
| Touchstone Large vs. Eagle Mlp Strategy | Touchstone Large vs. Nasdaq 100 2x Strategy | Touchstone Large vs. Mid Cap 15x Strategy | Touchstone Large vs. Western Assets Emerging |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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