Correlation Between Touchstone Large and Aqr Equity
Can any of the company-specific risk be diversified away by investing in both Touchstone Large and Aqr Equity 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 Touchstone Large and Aqr Equity into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Touchstone Large Cap and Aqr Equity Market, you can compare the effects of market volatilities on Touchstone Large and Aqr Equity 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 Touchstone Large with a short position of Aqr Equity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Touchstone Large and Aqr Equity.
Diversification Opportunities for Touchstone Large and Aqr Equity
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Touchstone and Aqr is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Touchstone Large Cap and Aqr Equity Market in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aqr Equity Market and Touchstone Large 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 Touchstone Large Cap are associated (or correlated) with Aqr Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aqr Equity Market has no effect on the direction of Touchstone Large i.e., Touchstone Large and Aqr Equity go up and down completely randomly.
Pair Corralation between Touchstone Large and Aqr Equity
Assuming the 90 days horizon Touchstone Large is expected to generate 1.73 times less return on investment than Aqr Equity. In addition to that, Touchstone Large is 1.54 times more volatile than Aqr Equity Market. It trades about 0.08 of its total potential returns per unit of risk. Aqr Equity Market is currently generating about 0.2 per unit of volatility. If you would invest 776.00 in Aqr Equity Market on September 12, 2024 and sell it today you would earn a total of 276.00 from holding Aqr Equity Market or generate 35.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Touchstone Large Cap vs. Aqr Equity Market
Performance |
| Timeline |
| Touchstone Large Cap |
| Aqr Equity Market |
Touchstone Large and Aqr Equity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Touchstone Large and Aqr Equity
The main advantage of trading using opposite Touchstone Large and Aqr Equity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Touchstone Large position performs unexpectedly, Aqr Equity 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 Equity will offset losses from the drop in Aqr Equity's long position.| Touchstone Large vs. Jhancock Disciplined Value | Touchstone Large vs. Fidelity Series 1000 | Touchstone Large vs. Dana Large Cap | Touchstone Large vs. Americafirst Large Cap |
| Aqr Equity vs. Jhancock Disciplined Value | Aqr Equity vs. Fisher Large Cap | Aqr Equity vs. T Rowe Price | Aqr Equity vs. Touchstone Large 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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