Correlation Between Aqr Long and Dfa Municipal
Can any of the company-specific risk be diversified away by investing in both Aqr Long and Dfa Municipal 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 Dfa Municipal 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 Dfa Municipal Real, you can compare the effects of market volatilities on Aqr Long and Dfa Municipal 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 Dfa Municipal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aqr Long and Dfa Municipal.
Diversification Opportunities for Aqr Long and Dfa Municipal
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Aqr and Dfa is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Aqr Long Short Equity and Dfa Municipal Real in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dfa Municipal Real 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 Dfa Municipal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dfa Municipal Real has no effect on the direction of Aqr Long i.e., Aqr Long and Dfa Municipal go up and down completely randomly.
Pair Corralation between Aqr Long and Dfa Municipal
Assuming the 90 days horizon Aqr Long Short Equity is expected to generate 6.82 times more return on investment than Dfa Municipal. However, Aqr Long is 6.82 times more volatile than Dfa Municipal Real. It trades about 0.19 of its potential returns per unit of risk. Dfa Municipal Real is currently generating about 0.19 per unit of risk. If you would invest 1,191 in Aqr Long Short Equity on June 5, 2025 and sell it today you would earn a total of 758.00 from holding Aqr Long Short Equity or generate 63.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aqr Long Short Equity vs. Dfa Municipal Real
Performance |
| Timeline |
| Aqr Long Short |
| Dfa Municipal Real |
Aqr Long and Dfa Municipal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aqr Long and Dfa Municipal
The main advantage of trading using opposite Aqr Long and Dfa Municipal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aqr Long position performs unexpectedly, Dfa Municipal 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 Dfa Municipal will offset losses from the drop in Dfa Municipal's long position.| Aqr Long vs. Dreyfus Short Intermediate | Aqr Long vs. Nuveen Short Term | Aqr Long vs. Nuveen Equity Longshort | Aqr Long vs. Goldman Sachs Short |
| Dfa Municipal vs. Shelton Emerging Markets | Dfa Municipal vs. Barings Active Short | Dfa Municipal vs. Tax Managed Mid Small | Dfa Municipal vs. Qs Growth Fund |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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