Correlation Between Aqr Sustainable and Guggenheim Large

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

Diversification Opportunities for Aqr Sustainable and Guggenheim Large

-0.52

Correlation Coefficient

Aqr Sustainable  Guggenheim Large

Excellent diversification

The 3 months correlation between Aqr and Guggenheim is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Aqr Sustainable Long Short and Guggenheim Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guggenheim Large Cap 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 Guggenheim Large. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guggenheim Large Cap has no effect on the direction of Aqr Sustainable i.e., Aqr Sustainable and Guggenheim Large go up and down completely randomly.

Pair Corralation between Aqr Sustainable and Guggenheim Large

Assuming the 90 days horizon Aqr Sustainable is expected to generate 1.47 times less return on investment than Guggenheim Large. But when comparing it to its historical volatility, Aqr Sustainable Long Short is 1.22 times less risky than Guggenheim Large. It trades about 0.09 of its potential returns per unit of risk. Guggenheim Large Cap is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  3,908  in Guggenheim Large Cap on October 26, 2024 and sell it today you would earn a total of  52.00  from holding Guggenheim Large Cap or generate 1.33% return on investment over 90 days.

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

Aqr Sustainable Long Short  vs.  Guggenheim Large Cap

Aqr Sustainable Long

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Aqr Sustainable Long Short are ranked lower than 12 (%) 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.

Guggenheim Large Cap

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Guggenheim Large Cap has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's forward indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with Aqr Sustainable and Guggenheim Large

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

The idea behind Aqr Sustainable Long Short and Guggenheim 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.

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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.