Correlation Between Locorr Market and Aqr Managed
Can any of the company-specific risk be diversified away by investing in both Locorr Market and Aqr Managed 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 Locorr Market and Aqr Managed into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Locorr Market Trend and Aqr Managed Futures, you can compare the effects of market volatilities on Locorr Market and Aqr Managed 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 Locorr Market with a short position of Aqr Managed. Check out your portfolio center. Please also check ongoing floating volatility patterns of Locorr Market and Aqr Managed.
Diversification Opportunities for Locorr Market and Aqr Managed
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Locorr and Aqr is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Locorr Market Trend and Aqr Managed Futures in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aqr Managed Futures and Locorr Market 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 Locorr Market Trend are associated (or correlated) with Aqr Managed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aqr Managed Futures has no effect on the direction of Locorr Market i.e., Locorr Market and Aqr Managed go up and down completely randomly.
Pair Corralation between Locorr Market and Aqr Managed
Assuming the 90 days horizon Locorr Market is expected to generate 1.29 times less return on investment than Aqr Managed. But when comparing it to its historical volatility, Locorr Market Trend is 1.04 times less risky than Aqr Managed. It trades about 0.25 of its potential returns per unit of risk. Aqr Managed Futures is currently generating about 0.31 of returns per unit of risk over similar time horizon. If you would invest 898.00 in Aqr Managed Futures on January 20, 2024 and sell it today you would earn a total of 35.00 from holding Aqr Managed Futures or generate 3.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Locorr Market Trend vs. Aqr Managed Futures
Performance |
| Timeline |
| Locorr Market Trend |
| Aqr Managed Futures |
Locorr Market and Aqr Managed Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Locorr Market and Aqr Managed
The main advantage of trading using opposite Locorr Market and Aqr Managed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Locorr Market position performs unexpectedly, Aqr Managed 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 Managed will offset losses from the drop in Aqr Managed's long position.| Locorr Market vs. Locorr Spectrum Income | Locorr Market vs. Locorr Spectrum Income | Locorr Market vs. Locorr Spectrum Income | Locorr Market vs. Locorr Longshort Modities |
| Aqr Managed vs. Aqr Large Cap | Aqr Managed vs. Aqr Large Cap | Aqr Managed vs. Aqr International Defensive | Aqr Managed vs. Aqr International Defensive |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
Other Complementary Tools
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets |