Correlation Between Davis Financial and Aqr Managed
Can any of the company-specific risk be diversified away by investing in both Davis Financial and Aqr Managed 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 Davis Financial and Aqr Managed into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Davis Financial Fund and Aqr Managed Futures, you can compare the effects of market volatilities on Davis Financial and Aqr Managed 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 Davis Financial with a short position of Aqr Managed. Check out your portfolio center. Please also check ongoing floating volatility patterns of Davis Financial and Aqr Managed.
Diversification Opportunities for Davis Financial and Aqr Managed
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Davis and Aqr is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Davis Financial Fund and Aqr Managed Futures in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aqr Managed Futures and Davis Financial 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 Davis Financial Fund are associated (or correlated) with Aqr Managed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aqr Managed Futures has no effect on the direction of Davis Financial i.e., Davis Financial and Aqr Managed go up and down completely randomly.
Pair Corralation between Davis Financial and Aqr Managed
Assuming the 90 days horizon Davis Financial Fund is expected to generate 1.49 times more return on investment than Aqr Managed. However, Davis Financial is 1.49 times more volatile than Aqr Managed Futures. It trades about 0.13 of its potential returns per unit of risk. Aqr Managed Futures is currently generating about 0.12 per unit of risk. If you would invest 6,460 in Davis Financial Fund on September 13, 2024 and sell it today you would earn a total of 419.00 from holding Davis Financial Fund or generate 6.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Davis Financial Fund vs. Aqr Managed Futures
Performance |
| Timeline |
| Davis Financial |
| Aqr Managed Futures |
Davis Financial and Aqr Managed Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Davis Financial and Aqr Managed
The main advantage of trading using opposite Davis Financial and Aqr Managed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Davis Financial position performs unexpectedly, Aqr Managed 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 Managed will offset losses from the drop in Aqr Managed's long position.| Davis Financial vs. Aam Select Income | Davis Financial vs. Western Asset Municipal | Davis Financial vs. Ab Value Fund | Davis Financial vs. Qs Large Cap |
| Aqr Managed vs. Blackrock Financial Institutions | Aqr Managed vs. Icon Financial Fund | Aqr Managed vs. Davis Financial Fund | Aqr Managed vs. Vanguard Financials Index |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
Other Complementary Tools
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| CEOs Directory Screen CEOs from public companies around the world |