Correlation Between Aqr Diversified and First Trust/confluence
Can any of the company-specific risk be diversified away by investing in both Aqr Diversified and First Trust/confluence 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 Diversified and First Trust/confluence into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aqr Diversified Arbitrage and First Trustconfluence Small, you can compare the effects of market volatilities on Aqr Diversified and First Trust/confluence 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 Diversified with a short position of First Trust/confluence. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aqr Diversified and First Trust/confluence.
Diversification Opportunities for Aqr Diversified and First Trust/confluence
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Aqr and First is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Aqr Diversified Arbitrage and First Trustconfluence Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Trust/confluence and Aqr Diversified 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 Diversified Arbitrage are associated (or correlated) with First Trust/confluence. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Trust/confluence has no effect on the direction of Aqr Diversified i.e., Aqr Diversified and First Trust/confluence go up and down completely randomly.
Pair Corralation between Aqr Diversified and First Trust/confluence
Assuming the 90 days horizon Aqr Diversified is expected to generate 3.4 times less return on investment than First Trust/confluence. But when comparing it to its historical volatility, Aqr Diversified Arbitrage is 16.08 times less risky than First Trust/confluence. It trades about 0.27 of its potential returns per unit of risk. First Trustconfluence Small is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 2,762 in First Trustconfluence Small on June 7, 2025 and sell it today you would earn a total of 114.00 from holding First Trustconfluence Small or generate 4.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aqr Diversified Arbitrage vs. First Trustconfluence Small
Performance |
| Timeline |
| Aqr Diversified Arbitrage |
| First Trust/confluence |
Aqr Diversified and First Trust/confluence Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aqr Diversified and First Trust/confluence
The main advantage of trading using opposite Aqr Diversified and First Trust/confluence positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aqr Diversified position performs unexpectedly, First Trust/confluence 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 First Trust/confluence will offset losses from the drop in First Trust/confluence's long position.| Aqr Diversified vs. Dunham High Yield | Aqr Diversified vs. Fidelity Capital Income | Aqr Diversified vs. Prudential High Yield | Aqr Diversified vs. Neuberger Berman Income |
| First Trust/confluence vs. Hartford Emerging Markets | First Trust/confluence vs. The Hartford Emerging | First Trust/confluence vs. Ep Emerging Markets | First Trust/confluence vs. Siit Emerging Markets |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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