Correlation Between State Street and Aqr Managed
Can any of the company-specific risk be diversified away by investing in both State Street 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 State Street and Aqr Managed into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between State Street Target and Aqr Managed Futures, you can compare the effects of market volatilities on State Street 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 State Street with a short position of Aqr Managed. Check out your portfolio center. Please also check ongoing floating volatility patterns of State Street and Aqr Managed.
Diversification Opportunities for State Street and Aqr Managed
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between State and Aqr is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding State Street Target 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 State Street 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 State Street Target 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 State Street i.e., State Street and Aqr Managed go up and down completely randomly.
Pair Corralation between State Street and Aqr Managed
Assuming the 90 days horizon State Street Target is expected to generate 0.55 times more return on investment than Aqr Managed. However, State Street Target is 1.81 times less risky than Aqr Managed. It trades about 0.08 of its potential returns per unit of risk. Aqr Managed Futures is currently generating about 0.03 per unit of risk. If you would invest 1,078 in State Street Target on September 3, 2024 and sell it today you would earn a total of 222.00 from holding State Street Target or generate 20.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
State Street Target vs. Aqr Managed Futures
Performance |
| Timeline |
| State Street Target |
| Aqr Managed Futures |
State Street and Aqr Managed Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with State Street and Aqr Managed
The main advantage of trading using opposite State Street and Aqr Managed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if State Street 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.| State Street vs. Dreyfus Technology Growth | State Street vs. Janus Global Technology | State Street vs. Red Oak Technology | State Street vs. Mfs Technology Fund |
| Aqr Managed vs. The Hartford Equity | Aqr Managed vs. Locorr Dynamic Equity | Aqr Managed vs. Jpmorgan Equity Income | Aqr Managed vs. Multimedia Portfolio Multimedia |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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