Correlation Between Aqr Risk-balanced and Delaware Healthcare

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

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

Diversification Opportunities for Aqr Risk-balanced and Delaware Healthcare

0.52

Correlation Coefficient

Aqr Risk-balanced  Delaware Healthcare

Very weak diversification

The 3 months correlation between Aqr and Delaware is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Aqr Risk Balanced Modities and Delaware Healthcare Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Delaware Healthcare and Aqr Risk-balanced 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 Risk Balanced Modities are associated (or correlated) with Delaware Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Delaware Healthcare has no effect on the direction of Aqr Risk-balanced i.e., Aqr Risk-balanced and Delaware Healthcare go up and down completely randomly.

Pair Corralation between Aqr Risk-balanced and Delaware Healthcare

Assuming the 90 days horizon Aqr Risk Balanced Modities is expected to generate 1.07 times more return on investment than Delaware Healthcare. However, Aqr Risk-balanced is 1.07 times more volatile than Delaware Healthcare Fund. It trades about -0.08 of its potential returns per unit of risk. Delaware Healthcare Fund is currently generating about -0.16 per unit of risk. If you would invest  889.00  in Aqr Risk Balanced Modities on October 9, 2024 and sell it today you would lose (14.00) from holding Aqr Risk Balanced Modities or give up 1.57% of portfolio value over 90 days.

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

Aqr Risk Balanced Modities  vs.  Delaware Healthcare Fund

Aqr Risk Balanced

Risk-Adjusted Performance

0 of 100

Very Weak

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

Delaware Healthcare

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Delaware Healthcare Fund has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's technical indicators remain fairly strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Pair Trading with Aqr Risk-balanced and Delaware Healthcare

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

The idea behind Aqr Risk Balanced Modities and Delaware Healthcare Fund 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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.