Correlation Between Aqr Large and Oakhurst Short

Can any of the company-specific risk be diversified away by investing in both Aqr Large and Oakhurst Short 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 Oakhurst Short 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 Oakhurst Short Duration, you can compare the effects of market volatilities on Aqr Large and Oakhurst Short 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 Oakhurst Short. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aqr Large and Oakhurst Short.

Diversification Opportunities for Aqr Large and Oakhurst Short

0.69

Correlation Coefficient

Aqr Large  Oakhurst Short

Poor diversification

The 3 months correlation between Aqr and Oakhurst is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Aqr Large Cap and Oakhurst Short Duration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oakhurst Short Duration 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 Oakhurst Short. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oakhurst Short Duration has no effect on the direction of Aqr Large i.e., Aqr Large and Oakhurst Short go up and down completely randomly.

Pair Corralation between Aqr Large and Oakhurst Short

Assuming the 90 days horizon Aqr Large Cap is expected to under-perform the Oakhurst Short. In addition to that, Aqr Large is 13.6 times more volatile than Oakhurst Short Duration. It trades about -0.1 of its total potential returns per unit of risk. Oakhurst Short Duration is currently generating about 0.03 per unit of volatility. If you would invest  891.00  in Oakhurst Short Duration on September 23, 2024 and sell it today you would earn a total of  2.00  from holding Oakhurst Short Duration or generate 0.22% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Aqr Large Cap  vs.  Oakhurst Short Duration

Aqr Large Cap

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Aqr Large Cap has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Oakhurst Short Duration

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Oakhurst Short Duration are ranked lower than 4 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical indicators, Oakhurst Short is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Aqr Large and Oakhurst Short

The main advantage of trading using opposite Aqr Large and Oakhurst Short positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aqr Large position performs unexpectedly, Oakhurst Short 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 Oakhurst Short will offset losses from the drop in Oakhurst Short's long position.

The idea behind Aqr Large Cap and Oakhurst Short Duration pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.