Correlation Between Amg Timessquare and Aqr International
Can any of the company-specific risk be diversified away by investing in both Amg Timessquare and Aqr International 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 Amg Timessquare and Aqr International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amg Timessquare International and Aqr International Defensive, you can compare the effects of market volatilities on Amg Timessquare and Aqr International 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 Amg Timessquare with a short position of Aqr International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amg Timessquare and Aqr International.
Diversification Opportunities for Amg Timessquare and Aqr International
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between AMG and Aqr is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Amg Timessquare International and Aqr International Defensive in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aqr International and Amg Timessquare 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 Amg Timessquare International are associated (or correlated) with Aqr International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aqr International has no effect on the direction of Amg Timessquare i.e., Amg Timessquare and Aqr International go up and down completely randomly.
Pair Corralation between Amg Timessquare and Aqr International
Assuming the 90 days horizon Amg Timessquare International is expected to generate 1.24 times more return on investment than Aqr International. However, Amg Timessquare is 1.24 times more volatile than Aqr International Defensive. It trades about 0.14 of its potential returns per unit of risk. Aqr International Defensive is currently generating about 0.16 per unit of risk. If you would invest 1,418 in Amg Timessquare International on December 27, 2024 and sell it today you would earn a total of 104.00 from holding Amg Timessquare International or generate 7.33% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Amg Timessquare International vs. Aqr International Defensive
Performance |
Timeline |
Amg Timessquare Inte |
Aqr International |
Amg Timessquare and Aqr International Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Amg Timessquare and Aqr International
The main advantage of trading using opposite Amg Timessquare and Aqr International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amg Timessquare position performs unexpectedly, Aqr International 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 International will offset losses from the drop in Aqr International's long position.Amg Timessquare vs. Baron Emerging Markets | Amg Timessquare vs. Parnassus Mid Cap | Amg Timessquare vs. Fidelity International Growth | Amg Timessquare vs. Df Dent Midcap |
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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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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