Correlation Between Davis Financial and Aqr Multi

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

By analyzing existing cross correlation between Davis Financial Fund and Aqr Multi Strategy Alternative, you can compare the effects of market volatilities on Davis Financial and Aqr Multi 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 Davis Financial with a short position of Aqr Multi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Davis Financial and Aqr Multi.

Diversification Opportunities for Davis Financial and Aqr Multi

0.0

Correlation Coefficient

Davis Financial  Aqr Multi

Pay attention - limited upside

The 3 months correlation between Davis and Aqr is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Davis Financial Fund and Aqr Multi Strategy Alternative in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aqr Multi Strategy and Davis Financial 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 Davis Financial Fund are associated (or correlated) with Aqr Multi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aqr Multi Strategy has no effect on the direction of Davis Financial i.e., Davis Financial and Aqr Multi go up and down completely randomly.

Pair Corralation between Davis Financial and Aqr Multi

If you would invest (100.00) in Aqr Multi Strategy Alternative on October 3, 2024 and sell it today you would earn a total of  100.00  from holding Aqr Multi Strategy Alternative or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Davis Financial Fund  vs.  Aqr Multi Strategy Alternative

Davis Financial

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Davis Financial Fund are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical and fundamental indicators, Davis Financial is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Aqr Multi Strategy

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Aqr Multi Strategy Alternative has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Aqr Multi is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Davis Financial and Aqr Multi

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

The idea behind Davis Financial Fund and Aqr Multi Strategy Alternative 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.