Correlation Between Aqr Large and Anchor Tactical

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

Diversification Opportunities for Aqr Large and Anchor Tactical

0.08

Correlation Coefficient

Aqr Large  Anchor Tactical

Significant diversification

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

Pair Corralation between Aqr Large and Anchor Tactical

Assuming the 90 days horizon Aqr Large Cap is expected to generate 0.9 times more return on investment than Anchor Tactical. However, Aqr Large Cap is 1.11 times less risky than Anchor Tactical. It trades about 0.18 of its potential returns per unit of risk. Anchor Tactical Credit is currently generating about -0.13 per unit of risk. If you would invest  2,094  in Aqr Large Cap on December 2, 2024 and sell it today you would earn a total of  41.00  from holding Aqr Large Cap or generate 1.96% return on investment over 90 days.

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

Aqr Large Cap  vs.  Anchor Tactical Credit

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 forward 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.

Anchor Tactical Credit

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Anchor Tactical Credit are ranked lower than 4 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Anchor Tactical showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Aqr Large and Anchor Tactical

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

The idea behind Aqr Large Cap and Anchor Tactical Credit 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.