Correlation Between SCOR PK and Aqr Managed
Can any of the company-specific risk be diversified away by investing in both SCOR PK 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 SCOR PK and Aqr Managed into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SCOR PK and Aqr Managed Futures, you can compare the effects of market volatilities on SCOR PK 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 SCOR PK with a short position of Aqr Managed. Check out your portfolio center. Please also check ongoing floating volatility patterns of SCOR PK and Aqr Managed.
Diversification Opportunities for SCOR PK and Aqr Managed
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SCOR and Aqr is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding SCOR PK 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 SCOR PK 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 SCOR PK 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 SCOR PK i.e., SCOR PK and Aqr Managed go up and down completely randomly.
Pair Corralation between SCOR PK and Aqr Managed
Assuming the 90 days horizon SCOR PK is expected to generate 2.08 times less return on investment than Aqr Managed. In addition to that, SCOR PK is 3.54 times more volatile than Aqr Managed Futures. It trades about 0.0 of its total potential returns per unit of risk. Aqr Managed Futures is currently generating about 0.04 per unit of volatility. If you would invest 800.00 in Aqr Managed Futures on September 12, 2024 and sell it today you would earn a total of 77.00 from holding Aqr Managed Futures or generate 9.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.15% |
| Values | Daily Returns |
SCOR PK vs. Aqr Managed Futures
Performance |
| Timeline |
| SCOR PK |
| Aqr Managed Futures |
SCOR PK and Aqr Managed Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SCOR PK and Aqr Managed
The main advantage of trading using opposite SCOR PK and Aqr Managed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SCOR PK 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.The idea behind SCOR PK and Aqr Managed Futures pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Aqr Managed vs. Pimco Trends Managed | Aqr Managed vs. Pimco Trends Managed | Aqr Managed vs. SCOR PK | Aqr Managed vs. Morningstar Unconstrained Allocation |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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