Correlation Between Aqr Managed and Nuveen Nwq

Can any of the company-specific risk be diversified away by investing in both Aqr Managed and Nuveen Nwq 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 Nuveen Nwq 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 Nuveen Nwq International, you can compare the effects of market volatilities on Aqr Managed and Nuveen Nwq 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 Nuveen Nwq. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aqr Managed and Nuveen Nwq.

Diversification Opportunities for Aqr Managed and Nuveen Nwq

0.8

Correlation Coefficient

Aqr Managed  Nuveen Nwq

Very poor diversification

The 3 months correlation between Aqr and Nuveen is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Aqr Managed Futures and Nuveen Nwq International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuveen Nwq International 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 Nuveen Nwq. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuveen Nwq International has no effect on the direction of Aqr Managed i.e., Aqr Managed and Nuveen Nwq go up and down completely randomly.

Pair Corralation between Aqr Managed and Nuveen Nwq

Assuming the 90 days horizon Aqr Managed is expected to generate 2.27 times less return on investment than Nuveen Nwq. In addition to that, Aqr Managed is 1.06 times more volatile than Nuveen Nwq International. It trades about 0.12 of its total potential returns per unit of risk. Nuveen Nwq International is currently generating about 0.28 per unit of volatility. If you would invest  2,743  in Nuveen Nwq International on December 19, 2024 and sell it today you would earn a total of  413.00  from holding Nuveen Nwq International or generate 15.06% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

Aqr Managed Futures  vs.  Nuveen Nwq International

Aqr Managed Futures

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Aqr Managed Futures are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward indicators, Aqr Managed may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Nuveen Nwq International

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Nuveen Nwq International are ranked lower than 21 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical and fundamental indicators, Nuveen Nwq showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Aqr Managed and Nuveen Nwq

The main advantage of trading using opposite Aqr Managed and Nuveen Nwq positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aqr Managed position performs unexpectedly, Nuveen Nwq 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 Nwq will offset losses from the drop in Nuveen Nwq's long position.

The idea behind Aqr Managed Futures and Nuveen Nwq International pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.