Correlation Between Aqr Tm and Ab Bond

Can any of the company-specific risk be diversified away by investing in both Aqr Tm and Ab Bond 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 Tm and Ab Bond into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Aqr Tm Emerging and Ab Bond Inflation, you can compare the effects of market volatilities on Aqr Tm and Ab Bond 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 Tm with a short position of Ab Bond. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aqr Tm and Ab Bond.

Diversification Opportunities for Aqr Tm and Ab Bond

0.33

Correlation Coefficient

Aqr Tm  Ab Bond

Weak diversification

The 3 months correlation between Aqr and ABNTX is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Aqr Tm Emerging and Ab Bond Inflation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ab Bond Inflation and Aqr Tm 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 Tm Emerging are associated (or correlated) with Ab Bond. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ab Bond Inflation has no effect on the direction of Aqr Tm i.e., Aqr Tm and Ab Bond go up and down completely randomly.

Pair Corralation between Aqr Tm and Ab Bond

Assuming the 90 days horizon Aqr Tm Emerging is expected to generate 5.57 times more return on investment than Ab Bond. However, Aqr Tm is 5.57 times more volatile than Ab Bond Inflation. It trades about 0.03 of its potential returns per unit of risk. Ab Bond Inflation is currently generating about 0.03 per unit of risk. If you would invest  1,075  in Aqr Tm Emerging on August 31, 2024 and sell it today you would earn a total of  17.00  from holding Aqr Tm Emerging or generate 1.58% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Aqr Tm Emerging  vs.  Ab Bond Inflation

Aqr Tm Emerging

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Aqr Tm Emerging are ranked lower than 2 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Aqr Tm is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Ab Bond Inflation

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Ab Bond Inflation are ranked lower than 2 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Ab Bond is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Aqr Tm and Ab Bond

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

The idea behind Aqr Tm Emerging and Ab Bond Inflation 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.

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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.