Correlation Between ANT and Aqr Alternative

Can any of the company-specific risk be diversified away by investing in both ANT and Aqr Alternative 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 ANT and Aqr Alternative into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between ANT and Aqr Alternative Risk, you can compare the effects of market volatilities on ANT and Aqr Alternative 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 ANT with a short position of Aqr Alternative. Check out your portfolio center. Please also check ongoing floating volatility patterns of ANT and Aqr Alternative.

Diversification Opportunities for ANT and Aqr Alternative

0.08

Correlation Coefficient

ANT  Aqr Alternative

Significant diversification

The 3 months correlation between ANT and Aqr is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding ANT and Aqr Alternative Risk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aqr Alternative Risk and ANT 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 ANT are associated (or correlated) with Aqr Alternative. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aqr Alternative Risk has no effect on the direction of ANT i.e., ANT and Aqr Alternative go up and down completely randomly.

Pair Corralation between ANT and Aqr Alternative

Assuming the 90 days trading horizon ANT is expected to generate 12.76 times more return on investment than Aqr Alternative. However, ANT is 12.76 times more volatile than Aqr Alternative Risk. It trades about 0.06 of its potential returns per unit of risk. Aqr Alternative Risk is currently generating about -0.09 per unit of risk. If you would invest  145.00  in ANT on October 9, 2024 and sell it today you would earn a total of  2.00  from holding ANT or generate 1.38% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	95.24%
Values	Daily Returns

ANT  vs.  Aqr Alternative Risk

ANT

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in ANT are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, ANT exhibited solid returns over the last few months and may actually be approaching a breakup point.

Aqr Alternative Risk

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Aqr Alternative Risk has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Aqr Alternative is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with ANT and Aqr Alternative

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

The idea behind ANT and Aqr Alternative Risk 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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.