Correlation Between Aqr Managed and Pgim Conservative

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

Diversification Opportunities for Aqr Managed and Pgim Conservative

-0.36

Correlation Coefficient

Aqr Managed  Pgim Conservative

Very good diversification

The 3 months correlation between Aqr and Pgim is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Aqr Managed Futures and Pgim Conservative Retirement in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pgim Conservative 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 Pgim Conservative. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pgim Conservative has no effect on the direction of Aqr Managed i.e., Aqr Managed and Pgim Conservative go up and down completely randomly.

Pair Corralation between Aqr Managed and Pgim Conservative

Assuming the 90 days horizon Aqr Managed is expected to generate 4.33 times less return on investment than Pgim Conservative. In addition to that, Aqr Managed is 2.12 times more volatile than Pgim Conservative Retirement. It trades about 0.02 of its total potential returns per unit of risk. Pgim Conservative Retirement is currently generating about 0.18 per unit of volatility. If you would invest  1,029  in Pgim Conservative Retirement on October 25, 2024 and sell it today you would earn a total of  13.00  from holding Pgim Conservative Retirement or generate 1.26% return on investment over 90 days.

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

Aqr Managed Futures  vs.  Pgim Conservative Retirement

Aqr Managed Futures

Risk-Adjusted Performance

11 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Aqr Managed Futures are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly unfluctuating forward indicators, Aqr Managed may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pgim Conservative

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Pgim Conservative Retirement are ranked lower than 2 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental indicators, Pgim Conservative is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Aqr Managed and Pgim Conservative

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

The idea behind Aqr Managed Futures and Pgim Conservative Retirement 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.