Correlation Between Aqr Diversified and Nuveen Minnesota
Can any of the company-specific risk be diversified away by investing in both Aqr Diversified and Nuveen Minnesota 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 Diversified and Nuveen Minnesota into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aqr Diversified Arbitrage and Nuveen Minnesota Intermediate, you can compare the effects of market volatilities on Aqr Diversified and Nuveen Minnesota 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 Diversified with a short position of Nuveen Minnesota. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aqr Diversified and Nuveen Minnesota.
Diversification Opportunities for Aqr Diversified and Nuveen Minnesota
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Aqr and Nuveen is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Aqr Diversified Arbitrage and Nuveen Minnesota Intermediate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuveen Minnesota Int and Aqr Diversified 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 Diversified Arbitrage are associated (or correlated) with Nuveen Minnesota. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuveen Minnesota Int has no effect on the direction of Aqr Diversified i.e., Aqr Diversified and Nuveen Minnesota go up and down completely randomly.
Pair Corralation between Aqr Diversified and Nuveen Minnesota
Assuming the 90 days horizon Aqr Diversified Arbitrage is expected to generate 0.64 times more return on investment than Nuveen Minnesota. However, Aqr Diversified Arbitrage is 1.56 times less risky than Nuveen Minnesota. It trades about 0.4 of its potential returns per unit of risk. Nuveen Minnesota Intermediate is currently generating about 0.02 per unit of risk. If you would invest 1,208 in Aqr Diversified Arbitrage on December 27, 2024 and sell it today you would earn a total of 32.00 from holding Aqr Diversified Arbitrage or generate 2.65% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Aqr Diversified Arbitrage vs. Nuveen Minnesota Intermediate
Performance |
Timeline |
Aqr Diversified Arbitrage |
Nuveen Minnesota Int |
Aqr Diversified and Nuveen Minnesota Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Aqr Diversified and Nuveen Minnesota
The main advantage of trading using opposite Aqr Diversified and Nuveen Minnesota positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aqr Diversified position performs unexpectedly, Nuveen Minnesota 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 Nuveen Minnesota will offset losses from the drop in Nuveen Minnesota's long position.Aqr Diversified vs. Aqr Large Cap | Aqr Diversified vs. Aqr Large Cap | Aqr Diversified vs. Aqr International Defensive | Aqr Diversified vs. Aqr International Defensive |
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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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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