Correlation Between Aqr Style and Blackrock Total

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

By analyzing existing cross correlation between Aqr Style Premia and Blackrock Total Factor, you can compare the effects of market volatilities on Aqr Style and Blackrock Total 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 Style with a short position of Blackrock Total. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aqr Style and Blackrock Total.

Diversification Opportunities for Aqr Style and Blackrock Total

-0.79

Correlation Coefficient

Aqr Style  Blackrock Total

Pay attention - limited upside

The 3 months correlation between Aqr and Blackrock is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Aqr Style Premia and Blackrock Total Factor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackrock Total Factor and Aqr Style 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 Style Premia are associated (or correlated) with Blackrock Total. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackrock Total Factor has no effect on the direction of Aqr Style i.e., Aqr Style and Blackrock Total go up and down completely randomly.

Pair Corralation between Aqr Style and Blackrock Total

Assuming the 90 days horizon Aqr Style Premia is expected to generate 0.5 times more return on investment than Blackrock Total. However, Aqr Style Premia is 2.0 times less risky than Blackrock Total. It trades about 0.04 of its potential returns per unit of risk. Blackrock Total Factor is currently generating about -0.04 per unit of risk. If you would invest  623.00  in Aqr Style Premia on February 1, 2024 and sell it today you would earn a total of  206.00  from holding Aqr Style Premia or generate 33.07% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	73.48%
Values	Daily Returns

Aqr Style Premia  vs.  Blackrock Total Factor

Aqr Style Premia

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Aqr Style Premia are ranked lower than 17 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Aqr Style may actually be approaching a critical reversion point that can send shares even higher in June 2024.

Blackrock Total Factor

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Blackrock Total Factor has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward indicators, Blackrock Total 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 Style and Blackrock Total

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

The idea behind Aqr Style Premia and Blackrock Total Factor 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.

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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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.