Correlation Between Aqr Sustainable and Rmb Mendon

Can any of the company-specific risk be diversified away by investing in both Aqr Sustainable and Rmb Mendon 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 Sustainable and Rmb Mendon into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Aqr Sustainable Long Short and Rmb Mendon Financial, you can compare the effects of market volatilities on Aqr Sustainable and Rmb Mendon 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 Sustainable with a short position of Rmb Mendon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aqr Sustainable and Rmb Mendon.

Diversification Opportunities for Aqr Sustainable and Rmb Mendon

0.14

Correlation Coefficient

Aqr Sustainable  Rmb Mendon

Average diversification

The 3 months correlation between Aqr and Rmb is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Aqr Sustainable Long Short and Rmb Mendon Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rmb Mendon Financial and Aqr Sustainable 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 Sustainable Long Short are associated (or correlated) with Rmb Mendon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rmb Mendon Financial has no effect on the direction of Aqr Sustainable i.e., Aqr Sustainable and Rmb Mendon go up and down completely randomly.

Pair Corralation between Aqr Sustainable and Rmb Mendon

If you would invest  1,335  in Aqr Sustainable Long Short on October 25, 2024 and sell it today you would earn a total of  8.00  from holding Aqr Sustainable Long Short or generate 0.6% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	94.74%
Values	Daily Returns

Aqr Sustainable Long Short  vs.  Rmb Mendon Financial

Aqr Sustainable Long

Risk-Adjusted Performance

11 of 100

Good

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

Rmb Mendon Financial

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Rmb Mendon Financial are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong essential indicators, Rmb Mendon 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 Sustainable and Rmb Mendon

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

The idea behind Aqr Sustainable Long Short and Rmb Mendon Financial 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.