Correlation Between Aqr Large and Large-cap Value
Can any of the company-specific risk be diversified away by investing in both Aqr Large and Large-cap Value 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 Large and Large-cap Value into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aqr Large Cap and Large Cap Value Profund, you can compare the effects of market volatilities on Aqr Large and Large-cap Value 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 Large with a short position of Large-cap Value. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aqr Large and Large-cap Value.
Diversification Opportunities for Aqr Large and Large-cap Value
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Aqr and Large-cap is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Aqr Large Cap and Large Cap Value Profund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Large Cap Value and Aqr Large 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 Large Cap are associated (or correlated) with Large-cap Value. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Large Cap Value has no effect on the direction of Aqr Large i.e., Aqr Large and Large-cap Value go up and down completely randomly.
Pair Corralation between Aqr Large and Large-cap Value
Assuming the 90 days horizon Aqr Large Cap is expected to generate 1.64 times more return on investment than Large-cap Value. However, Aqr Large is 1.64 times more volatile than Large Cap Value Profund. It trades about 0.1 of its potential returns per unit of risk. Large Cap Value Profund is currently generating about 0.11 per unit of risk. If you would invest 2,145 in Aqr Large Cap on August 27, 2024 and sell it today you would earn a total of 423.00 from holding Aqr Large Cap or generate 19.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aqr Large Cap vs. Large Cap Value Profund
Performance |
| Timeline |
| Aqr Large Cap |
| Large Cap Value |
Aqr Large and Large-cap Value Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aqr Large and Large-cap Value
The main advantage of trading using opposite Aqr Large and Large-cap Value positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aqr Large position performs unexpectedly, Large-cap Value 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 Large-cap Value will offset losses from the drop in Large-cap Value's long position.| Aqr Large vs. Ishares Municipal Bond | Aqr Large vs. Counterpoint Tactical Municipal | Aqr Large vs. T Rowe Price | Aqr Large vs. Nuveen All American Municipal |
| Large-cap Value vs. Short Real Estate | Large-cap Value vs. Short Real Estate | Large-cap Value vs. Ultrashort Mid Cap Profund | Large-cap Value vs. Ultrashort Mid Cap Profund |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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