Correlation Between Aqr Long and Short Oil
Can any of the company-specific risk be diversified away by investing in both Aqr Long and Short Oil 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 Long and Short Oil into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aqr Long Short Equity and Short Oil Gas, you can compare the effects of market volatilities on Aqr Long and Short Oil 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 Long with a short position of Short Oil. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aqr Long and Short Oil.
Diversification Opportunities for Aqr Long and Short Oil
Very good diversification
The 3 months correlation between Aqr and Short is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Aqr Long Short Equity and Short Oil Gas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Short Oil Gas and Aqr Long 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 Long Short Equity are associated (or correlated) with Short Oil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Short Oil Gas has no effect on the direction of Aqr Long i.e., Aqr Long and Short Oil go up and down completely randomly.
Pair Corralation between Aqr Long and Short Oil
Assuming the 90 days horizon Aqr Long Short Equity is expected to generate 0.55 times more return on investment than Short Oil. However, Aqr Long Short Equity is 1.83 times less risky than Short Oil. It trades about 0.12 of its potential returns per unit of risk. Short Oil Gas is currently generating about 0.02 per unit of risk. If you would invest 1,253 in Aqr Long Short Equity on September 26, 2024 and sell it today you would earn a total of 314.00 from holding Aqr Long Short Equity or generate 25.06% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Aqr Long Short Equity vs. Short Oil Gas
Performance |
Timeline |
Aqr Long Short |
Short Oil Gas |
Aqr Long and Short Oil Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Aqr Long and Short Oil
The main advantage of trading using opposite Aqr Long and Short Oil positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aqr Long position performs unexpectedly, Short Oil 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 Short Oil will offset losses from the drop in Short Oil's long position.Aqr Long vs. Aqr Large Cap | Aqr Long vs. Aqr Large Cap | Aqr Long vs. Aqr International Defensive | Aqr Long 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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