Correlation Between Templeton Foreign and Aqr Managed
Can any of the company-specific risk be diversified away by investing in both Templeton Foreign 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 Templeton Foreign and Aqr Managed into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Templeton Foreign Fund and Aqr Managed Futures, you can compare the effects of market volatilities on Templeton Foreign 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 Templeton Foreign with a short position of Aqr Managed. Check out your portfolio center. Please also check ongoing floating volatility patterns of Templeton Foreign and Aqr Managed.
Diversification Opportunities for Templeton Foreign and Aqr Managed
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Templeton and Aqr is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Templeton Foreign 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 Templeton Foreign 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 Templeton Foreign 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 Templeton Foreign i.e., Templeton Foreign and Aqr Managed go up and down completely randomly.
Pair Corralation between Templeton Foreign and Aqr Managed
Assuming the 90 days horizon Templeton Foreign is expected to generate 1.55 times less return on investment than Aqr Managed. But when comparing it to its historical volatility, Templeton Foreign Fund is 1.04 times less risky than Aqr Managed. It trades about 0.14 of its potential returns per unit of risk. Aqr Managed Futures is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 854.00 in Aqr Managed Futures on September 13, 2024 and sell it today you would earn a total of 25.00 from holding Aqr Managed Futures or generate 2.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Templeton Foreign Fund vs. Aqr Managed Futures
Performance |
| Timeline |
| Templeton Foreign |
| Aqr Managed Futures |
Templeton Foreign and Aqr Managed Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Templeton Foreign and Aqr Managed
The main advantage of trading using opposite Templeton Foreign and Aqr Managed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Templeton Foreign 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.| Templeton Foreign vs. Us High Relative | Templeton Foreign vs. Artisan High Income | Templeton Foreign vs. Western Asset High | Templeton Foreign vs. Siit High Yield |
| Aqr Managed vs. Aqr Large Cap | Aqr Managed vs. Aqr Small Cap | Aqr Managed vs. Aqr Small Cap | Aqr Managed vs. Aqr Small Cap |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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