Correlation Between Aqr Long and DarioHealth Corp

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

Diversification Opportunities for Aqr Long and DarioHealth Corp

-0.9

Correlation Coefficient

Aqr Long  DarioHealth Corp

Pay attention - limited upside

The 3 months correlation between Aqr and DarioHealth is -0.9. Overlapping area represents the amount of risk that can be diversified away by holding Aqr Long Short Equity and DarioHealth Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DarioHealth Corp and Aqr Long 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 DarioHealth Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DarioHealth Corp has no effect on the direction of Aqr Long i.e., Aqr Long and DarioHealth Corp go up and down completely randomly.

Pair Corralation between Aqr Long and DarioHealth Corp

Assuming the 90 days horizon Aqr Long is expected to generate 2.88 times less return on investment than DarioHealth Corp. But when comparing it to its historical volatility, Aqr Long Short Equity is 14.17 times less risky than DarioHealth Corp. It trades about 0.17 of its potential returns per unit of risk. DarioHealth Corp is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  148.00  in DarioHealth Corp on January 30, 2024 and sell it today you would earn a total of  0.00  from holding DarioHealth Corp or generate 0.0% return on investment over 90 days.

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

Aqr Long Short Equity  vs.  DarioHealth Corp

Aqr Long Short

Risk-Adjusted Performance

25 of 100

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Aqr Long Short Equity are ranked lower than 25 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Aqr Long may actually be approaching a critical reversion point that can send shares even higher in May 2024.

DarioHealth Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days DarioHealth Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's forward indicators remain very healthy which may send shares a bit higher in May 2024. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Aqr Long and DarioHealth Corp

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

The idea behind Aqr Long Short Equity and DarioHealth Corp 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.