Correlation Between Balanced Strategy and Aqr Large
Can any of the company-specific risk be diversified away by investing in both Balanced Strategy and Aqr 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 Balanced Strategy and Aqr Large into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Balanced Strategy Fund and Aqr Large Cap, you can compare the effects of market volatilities on Balanced Strategy and Aqr 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 Balanced Strategy with a short position of Aqr Large. Check out your portfolio center. Please also check ongoing floating volatility patterns of Balanced Strategy and Aqr Large.
Diversification Opportunities for Balanced Strategy and Aqr Large
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Balanced and Aqr is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Balanced Strategy Fund and Aqr Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aqr Large Cap and Balanced Strategy 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 Balanced Strategy Fund are associated (or correlated) with Aqr Large. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aqr Large Cap has no effect on the direction of Balanced Strategy i.e., Balanced Strategy and Aqr Large go up and down completely randomly.
Pair Corralation between Balanced Strategy and Aqr Large
Assuming the 90 days horizon Balanced Strategy Fund is expected to generate 0.22 times more return on investment than Aqr Large. However, Balanced Strategy Fund is 4.47 times less risky than Aqr Large. It trades about -0.17 of its potential returns per unit of risk. Aqr Large Cap is currently generating about -0.23 per unit of risk. If you would invest 1,043 in Balanced Strategy Fund on October 14, 2024 and sell it today you would lose (21.00) from holding Balanced Strategy Fund or give up 2.01% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Balanced Strategy Fund vs. Aqr Large Cap
Performance |
| Timeline |
| Balanced Strategy |
| Aqr Large Cap |
Balanced Strategy and Aqr Large Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Balanced Strategy and Aqr Large
The main advantage of trading using opposite Balanced Strategy and Aqr Large positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Balanced Strategy position performs unexpectedly, Aqr 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 Aqr Large will offset losses from the drop in Aqr Large's long position.| Balanced Strategy vs. Multi Manager High Yield | Balanced Strategy vs. Barings High Yield | Balanced Strategy vs. Artisan High Income | Balanced Strategy vs. Ab High Income |
| Aqr Large vs. Oberweis Emerging Growth | Aqr Large vs. Dow 2x Strategy | Aqr Large vs. Balanced Strategy Fund | Aqr Large vs. Realestaterealreturn Strategy Fund |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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