Correlation Between Aqr Managed and Columbia Select
Can any of the company-specific risk be diversified away by investing in both Aqr Managed and Columbia Select 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 Managed and Columbia Select into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aqr Managed Futures and Columbia Select Smaller Cap, you can compare the effects of market volatilities on Aqr Managed and Columbia Select 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 Managed with a short position of Columbia Select. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aqr Managed and Columbia Select.
Diversification Opportunities for Aqr Managed and Columbia Select
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Aqr and Columbia is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Aqr Managed Futures and Columbia Select Smaller Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Columbia Select Smaller and Aqr Managed 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 Managed Futures are associated (or correlated) with Columbia Select. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Columbia Select Smaller has no effect on the direction of Aqr Managed i.e., Aqr Managed and Columbia Select go up and down completely randomly.
Pair Corralation between Aqr Managed and Columbia Select
Assuming the 90 days horizon Aqr Managed Futures is expected to generate 0.59 times more return on investment than Columbia Select. However, Aqr Managed Futures is 1.69 times less risky than Columbia Select. It trades about 0.11 of its potential returns per unit of risk. Columbia Select Smaller Cap is currently generating about -0.13 per unit of risk. If you would invest 850.00 in Aqr Managed Futures on December 29, 2024 and sell it today you would earn a total of 38.00 from holding Aqr Managed Futures or generate 4.47% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Aqr Managed Futures vs. Columbia Select Smaller Cap
Performance |
Timeline |
Aqr Managed Futures |
Columbia Select Smaller |
Aqr Managed and Columbia Select Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Aqr Managed and Columbia Select
The main advantage of trading using opposite Aqr Managed and Columbia Select positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aqr Managed position performs unexpectedly, Columbia Select 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 Columbia Select will offset losses from the drop in Columbia Select's long position.Aqr Managed vs. Alpsalerian Energy Infrastructure | Aqr Managed vs. Goehring Rozencwajg Resources | Aqr Managed vs. Adams Natural Resources | Aqr Managed vs. Invesco Energy Fund |
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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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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