Correlation Between Aqr Managed and Federated Emerging
Can any of the company-specific risk be diversified away by investing in both Aqr Managed and Federated Emerging 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 Managed and Federated Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aqr Managed Futures and Federated Emerging Market, you can compare the effects of market volatilities on Aqr Managed and Federated Emerging 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 Managed with a short position of Federated Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aqr Managed and Federated Emerging.
Diversification Opportunities for Aqr Managed and Federated Emerging
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Aqr and Federated is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Aqr Managed Futures and Federated Emerging Market in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated Emerging Market and Aqr Managed 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 Managed Futures are associated (or correlated) with Federated Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federated Emerging Market has no effect on the direction of Aqr Managed i.e., Aqr Managed and Federated Emerging go up and down completely randomly.
Pair Corralation between Aqr Managed and Federated Emerging
Assuming the 90 days horizon Aqr Managed Futures is expected to generate 3.8 times more return on investment than Federated Emerging. However, Aqr Managed is 3.8 times more volatile than Federated Emerging Market. It trades about 0.15 of its potential returns per unit of risk. Federated Emerging Market is currently generating about 0.22 per unit of risk. If you would invest 835.00 in Aqr Managed Futures on December 21, 2024 and sell it today you would earn a total of 68.00 from holding Aqr Managed Futures or generate 8.14% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 98.33% |
Values | Daily Returns |
Aqr Managed Futures vs. Federated Emerging Market
Performance |
Timeline |
Aqr Managed Futures |
Federated Emerging Market |
Aqr Managed and Federated Emerging Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Aqr Managed and Federated Emerging
The main advantage of trading using opposite Aqr Managed and Federated Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aqr Managed position performs unexpectedly, Federated Emerging 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 Federated Emerging will offset losses from the drop in Federated Emerging's long position.Aqr Managed vs. International Investors Gold | Aqr Managed vs. Fidelity Advisor Gold | Aqr Managed vs. Gamco Global Gold | Aqr Managed vs. Sprott Gold Equity |
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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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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