Correlation Between Aqr Long-short and Shelton Emerging
Can any of the company-specific risk be diversified away by investing in both Aqr Long-short and Shelton Emerging 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 Shelton Emerging 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 Shelton Emerging Markets, you can compare the effects of market volatilities on Aqr Long-short and Shelton Emerging 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 Shelton Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aqr Long-short and Shelton Emerging.
Diversification Opportunities for Aqr Long-short and Shelton Emerging
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Aqr and Shelton is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Aqr Long Short Equity and Shelton Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shelton Emerging Markets 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 Shelton Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shelton Emerging Markets has no effect on the direction of Aqr Long-short i.e., Aqr Long-short and Shelton Emerging go up and down completely randomly.
Pair Corralation between Aqr Long-short and Shelton Emerging
Assuming the 90 days horizon Aqr Long Short Equity is expected to generate 0.62 times more return on investment than Shelton Emerging. However, Aqr Long Short Equity is 1.61 times less risky than Shelton Emerging. It trades about 0.16 of its potential returns per unit of risk. Shelton Emerging Markets is currently generating about -0.22 per unit of risk. If you would invest 1,469 in Aqr Long Short Equity on January 25, 2024 and sell it today you would earn a total of 24.00 from holding Aqr Long Short Equity or generate 1.63% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Aqr Long Short Equity vs. Shelton Emerging Markets
Performance |
Timeline |
Aqr Long Short |
Shelton Emerging Markets |
Aqr Long-short and Shelton Emerging Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Aqr Long-short and Shelton Emerging
The main advantage of trading using opposite Aqr Long-short and Shelton Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aqr Long-short position performs unexpectedly, Shelton Emerging 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 Shelton Emerging will offset losses from the drop in Shelton Emerging'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 |
Shelton Emerging vs. California Tax Free Income | Shelton Emerging vs. Shelton Funds | Shelton Emerging vs. Nasdaq 100 Index Fund | Shelton Emerging vs. Shelton E Value |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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