Correlation Between Aqr Long-short and Deutsche Bank
Can any of the company-specific risk be diversified away by investing in both Aqr Long-short and Deutsche Bank 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 Long-short and Deutsche Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aqr Long Short Equity and Deutsche Bank AG, you can compare the effects of market volatilities on Aqr Long-short and Deutsche Bank 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 Long-short with a short position of Deutsche Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aqr Long-short and Deutsche Bank.
Diversification Opportunities for Aqr Long-short and Deutsche Bank
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Aqr and Deutsche is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Aqr Long Short Equity and Deutsche Bank AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Deutsche Bank AG and Aqr Long-short 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 Long Short Equity are associated (or correlated) with Deutsche Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Deutsche Bank AG has no effect on the direction of Aqr Long-short i.e., Aqr Long-short and Deutsche Bank go up and down completely randomly.
Pair Corralation between Aqr Long-short and Deutsche Bank
Assuming the 90 days horizon Aqr Long-short is expected to generate 4.85 times less return on investment than Deutsche Bank. But when comparing it to its historical volatility, Aqr Long Short Equity is 3.06 times less risky than Deutsche Bank. It trades about 0.16 of its potential returns per unit of risk. Deutsche Bank AG is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 1,527 in Deutsche Bank AG on January 25, 2024 and sell it today you would earn a total of 123.00 from holding Deutsche Bank AG or generate 8.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aqr Long Short Equity vs. Deutsche Bank AG
Performance |
| Timeline |
| Aqr Long Short |
| Deutsche Bank AG |
Aqr Long-short and Deutsche Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aqr Long-short and Deutsche Bank
The main advantage of trading using opposite Aqr Long-short and Deutsche Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aqr Long-short position performs unexpectedly, Deutsche Bank 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 Deutsche Bank will offset losses from the drop in Deutsche Bank's long position.| Aqr Long-short vs. Aqr Large Cap | Aqr Long-short vs. Aqr Large Cap | Aqr Long-short vs. Aqr International Defensive | Aqr Long-short vs. Aqr International Defensive |
| Deutsche Bank vs. Banco Bradesco SA | Deutsche Bank vs. Itau Unibanco Banco | Deutsche Bank vs. Lloyds Banking Group | Deutsche Bank vs. Banco Santander Brasil |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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