Correlation Between Aqr Large and Frost Growth
Can any of the company-specific risk be diversified away by investing in both Aqr Large and Frost Growth 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 Aqr Large and Frost Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aqr Large Cap and Frost Growth Equity, you can compare the effects of market volatilities on Aqr Large and Frost Growth 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 Aqr Large with a short position of Frost Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aqr Large and Frost Growth.
Diversification Opportunities for Aqr Large and Frost Growth
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Aqr and Frost is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Aqr Large Cap and Frost Growth Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Frost Growth Equity and Aqr 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 Aqr Large Cap are associated (or correlated) with Frost Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Frost Growth Equity has no effect on the direction of Aqr Large i.e., Aqr Large and Frost Growth go up and down completely randomly.
Pair Corralation between Aqr Large and Frost Growth
Assuming the 90 days horizon Aqr Large Cap is expected to generate 0.68 times more return on investment than Frost Growth. However, Aqr Large Cap is 1.48 times less risky than Frost Growth. It trades about 0.12 of its potential returns per unit of risk. Frost Growth Equity is currently generating about 0.03 per unit of risk. If you would invest 1,929 in Aqr Large Cap on September 19, 2024 and sell it today you would earn a total of 640.00 from holding Aqr Large Cap or generate 33.18% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Aqr Large Cap vs. Frost Growth Equity
Performance |
Timeline |
Aqr Large Cap |
Frost Growth Equity |
Aqr Large and Frost Growth Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Aqr Large and Frost Growth
The main advantage of trading using opposite Aqr Large and Frost Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aqr Large position performs unexpectedly, Frost Growth 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 Frost Growth will offset losses from the drop in Frost Growth's long position.Aqr Large vs. Aqr International Defensive | Aqr Large vs. Aqr International Defensive | Aqr Large vs. Aqr International Defensive | Aqr Large vs. Aqr Long Short Equity |
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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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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