Correlation Between Aqr Risk-balanced and Aqr Large

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

Diversification Opportunities for Aqr Risk-balanced and Aqr Large

-0.3

Correlation Coefficient

Aqr Risk-balanced  Aqr Large

Very good diversification

The 3 months correlation between Aqr and Aqr is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Aqr Risk Balanced Modities and Aqr Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aqr Large Cap 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 Aqr Large. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aqr Large Cap has no effect on the direction of Aqr Risk-balanced i.e., Aqr Risk-balanced and Aqr Large go up and down completely randomly.

Pair Corralation between Aqr Risk-balanced and Aqr Large

Assuming the 90 days horizon Aqr Risk Balanced Modities is expected to generate 0.69 times more return on investment than Aqr Large. However, Aqr Risk Balanced Modities is 1.45 times less risky than Aqr Large. It trades about -0.09 of its potential returns per unit of risk. Aqr Large Cap is currently generating about -0.13 per unit of risk. If you would invest  900.00  in Aqr Risk Balanced Modities on December 2, 2024 and sell it today you would lose (13.00) from holding Aqr Risk Balanced Modities or give up 1.44% of portfolio value over 90 days.

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

Aqr Risk Balanced Modities  vs.  Aqr Large Cap

Aqr Risk Balanced

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Aqr Risk Balanced Modities are ranked lower than 8 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic 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.

Aqr Large Cap

Risk-Adjusted Performance

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 weak performance in the last few months, the Fund's primary indicators remain fairly strong which may send shares a bit higher in April 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 Aqr Large

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

The idea behind Aqr Risk Balanced Modities and Aqr Large Cap 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.