Correlation Between Aqr Managed and Transamerica Large

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

Diversification Opportunities for Aqr Managed and Transamerica Large

-0.58

Correlation Coefficient

Aqr Managed  Transamerica Large

Excellent diversification

The 3 months correlation between Aqr and Transamerica is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Aqr Managed Futures and Transamerica Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Transamerica Large Cap 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 Transamerica Large. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Transamerica Large Cap has no effect on the direction of Aqr Managed i.e., Aqr Managed and Transamerica Large go up and down completely randomly.

Pair Corralation between Aqr Managed and Transamerica Large

Assuming the 90 days horizon Aqr Managed Futures is expected to under-perform the Transamerica Large. In addition to that, Aqr Managed is 1.14 times more volatile than Transamerica Large Cap. It trades about 0.0 of its total potential returns per unit of risk. Transamerica Large Cap is currently generating about 0.3 per unit of volatility. If you would invest  1,477  in Transamerica Large Cap on October 26, 2024 and sell it today you would earn a total of  59.00  from holding Transamerica Large Cap or generate 3.99% return on investment over 90 days.

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

Aqr Managed Futures  vs.  Transamerica Large Cap

Aqr Managed Futures

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Aqr Managed Futures are ranked lower than 10 (%) 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 February 2025.

Transamerica Large Cap

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Transamerica Large Cap are ranked lower than 2 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Transamerica Large 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 Transamerica Large

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

The idea behind Aqr Managed Futures and Transamerica Large Cap 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.