Correlation Between Invesco Technology and Aqr Managed
Can any of the company-specific risk be diversified away by investing in both Invesco Technology and Aqr Managed 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 Invesco Technology and Aqr Managed into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Invesco Technology Fund and Aqr Managed Futures, you can compare the effects of market volatilities on Invesco Technology and Aqr Managed 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 Invesco Technology with a short position of Aqr Managed. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco Technology and Aqr Managed.
Diversification Opportunities for Invesco Technology and Aqr Managed
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Invesco and Aqr is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Invesco Technology Fund and Aqr Managed Futures in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aqr Managed Futures and Invesco Technology 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 Invesco Technology Fund are associated (or correlated) with Aqr Managed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aqr Managed Futures has no effect on the direction of Invesco Technology i.e., Invesco Technology and Aqr Managed go up and down completely randomly.
Pair Corralation between Invesco Technology and Aqr Managed
Assuming the 90 days horizon Invesco Technology Fund is expected to under-perform the Aqr Managed. In addition to that, Invesco Technology is 2.04 times more volatile than Aqr Managed Futures. It trades about -0.57 of its total potential returns per unit of risk. Aqr Managed Futures is currently generating about -0.02 per unit of volatility. If you would invest 888.00 in Aqr Managed Futures on December 10, 2024 and sell it today you would lose (5.00) from holding Aqr Managed Futures or give up 0.56% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Invesco Technology Fund vs. Aqr Managed Futures
Performance |
Timeline |
Invesco Technology |
Aqr Managed Futures |
Invesco Technology and Aqr Managed Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Invesco Technology and Aqr Managed
The main advantage of trading using opposite Invesco Technology and Aqr Managed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Invesco Technology position performs unexpectedly, Aqr Managed 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 Managed will offset losses from the drop in Aqr Managed's long position.Invesco Technology vs. Morningstar Defensive Bond | Invesco Technology vs. Gmo E Plus | Invesco Technology vs. Legg Mason Partners | Invesco Technology vs. Intermediate Bond 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 Stocks Directory module to find actively traded stocks across global markets.
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