Correlation Between Large-cap Growth and Aqr Managed
Can any of the company-specific risk be diversified away by investing in both Large-cap Growth 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 Large-cap Growth and Aqr Managed into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Large Cap Growth Profund and Aqr Managed Futures, you can compare the effects of market volatilities on Large-cap Growth 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 Large-cap Growth with a short position of Aqr Managed. Check out your portfolio center. Please also check ongoing floating volatility patterns of Large-cap Growth and Aqr Managed.
Diversification Opportunities for Large-cap Growth and Aqr Managed
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between LARGE-CAP and Aqr is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Large Cap Growth Profund 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 Large-cap Growth 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 Large Cap Growth Profund 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 Large-cap Growth i.e., Large-cap Growth and Aqr Managed go up and down completely randomly.
Pair Corralation between Large-cap Growth and Aqr Managed
Assuming the 90 days horizon Large Cap Growth Profund is expected to generate 1.7 times more return on investment than Aqr Managed. However, Large-cap Growth is 1.7 times more volatile than Aqr Managed Futures. It trades about 0.13 of its potential returns per unit of risk. Aqr Managed Futures is currently generating about 0.02 per unit of risk. If you would invest 3,178 in Large Cap Growth Profund on October 27, 2024 and sell it today you would earn a total of 1,588 from holding Large Cap Growth Profund or generate 49.97% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Large Cap Growth Profund vs. Aqr Managed Futures
Performance |
Timeline |
Large Cap Growth |
Aqr Managed Futures |
Large-cap Growth and Aqr Managed Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Large-cap Growth and Aqr Managed
The main advantage of trading using opposite Large-cap Growth and Aqr Managed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Large-cap Growth 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.Large-cap Growth vs. Lord Abbett Diversified | Large-cap Growth vs. Wells Fargo Diversified | Large-cap Growth vs. Jhancock Diversified Macro | Large-cap Growth vs. Tiaa Cref Lifestyle Servative |
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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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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