Correlation Between American Funds and Aqr Global
Can any of the company-specific risk be diversified away by investing in both American Funds and Aqr Global 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 American Funds and Aqr Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Funds 2055 and Aqr Global Macro, you can compare the effects of market volatilities on American Funds and Aqr Global 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 American Funds with a short position of Aqr Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Funds and Aqr Global.
Diversification Opportunities for American Funds and Aqr Global
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between American and Aqr is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding American Funds 2055 and Aqr Global Macro in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aqr Global Macro and American Funds 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 American Funds 2055 are associated (or correlated) with Aqr Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aqr Global Macro has no effect on the direction of American Funds i.e., American Funds and Aqr Global go up and down completely randomly.
Pair Corralation between American Funds and Aqr Global
Assuming the 90 days horizon American Funds 2055 is expected to generate 1.41 times more return on investment than Aqr Global. However, American Funds is 1.41 times more volatile than Aqr Global Macro. It trades about 0.25 of its potential returns per unit of risk. Aqr Global Macro is currently generating about 0.09 per unit of risk. If you would invest 2,574 in American Funds 2055 on November 3, 2024 and sell it today you would earn a total of 96.00 from holding American Funds 2055 or generate 3.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
American Funds 2055 vs. Aqr Global Macro
Performance |
| Timeline |
| American Funds 2055 |
| Aqr Global Macro |
American Funds and Aqr Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Funds and Aqr Global
The main advantage of trading using opposite American Funds and Aqr Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Funds position performs unexpectedly, Aqr Global 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 Global will offset losses from the drop in Aqr Global's long position.| American Funds vs. Asg Managed Futures | American Funds vs. Abbey Capital Futures | American Funds vs. Guidepath Managed Futures | American Funds vs. Short Duration Inflation |
| Aqr Global vs. Western Assets Emerging | Aqr Global vs. Angel Oak Multi Strategy | Aqr Global vs. Nasdaq 100 2x Strategy | Aqr Global vs. Doubleline 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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