Correlation Between Vanguard Energy and Aqr Managed
Can any of the company-specific risk be diversified away by investing in both Vanguard Energy 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 Vanguard Energy and Aqr Managed into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanguard Energy Index and Aqr Managed Futures, you can compare the effects of market volatilities on Vanguard Energy 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 Vanguard Energy with a short position of Aqr Managed. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Energy and Aqr Managed.
Diversification Opportunities for Vanguard Energy and Aqr Managed
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Vanguard and Aqr is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Energy Index 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 Vanguard Energy 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 Vanguard Energy Index 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 Vanguard Energy i.e., Vanguard Energy and Aqr Managed go up and down completely randomly.
Pair Corralation between Vanguard Energy and Aqr Managed
Assuming the 90 days horizon Vanguard Energy Index is expected to generate 1.11 times more return on investment than Aqr Managed. However, Vanguard Energy is 1.11 times more volatile than Aqr Managed Futures. It trades about 0.0 of its potential returns per unit of risk. Aqr Managed Futures is currently generating about -0.01 per unit of risk. If you would invest 6,187 in Vanguard Energy Index on November 4, 2024 and sell it today you would lose (12.00) from holding Vanguard Energy Index or give up 0.19% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vanguard Energy Index vs. Aqr Managed Futures
Performance |
| Timeline |
| Vanguard Energy Index |
| Aqr Managed Futures |
Vanguard Energy and Aqr Managed Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Energy and Aqr Managed
The main advantage of trading using opposite Vanguard Energy and Aqr Managed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Energy 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.| Vanguard Energy vs. Vanguard Financials Index | Vanguard Energy vs. Vanguard Utilities Index | Vanguard Energy vs. Vanguard Materials Index | Vanguard Energy vs. Vanguard Sumer Staples |
| Aqr Managed vs. Nasdaq 100 2x Strategy | Aqr Managed vs. Federated Emerging Market | Aqr Managed vs. Barings Emerging Markets | Aqr Managed vs. Siit Emerging Markets |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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