Correlation Between Dana Large and Aqr Small
Can any of the company-specific risk be diversified away by investing in both Dana Large and Aqr Small 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 Dana Large and Aqr Small into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dana Large Cap and Aqr Small Cap, you can compare the effects of market volatilities on Dana Large and Aqr Small 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 Dana Large with a short position of Aqr Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dana Large and Aqr Small.
Diversification Opportunities for Dana Large and Aqr Small
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Dana and Aqr is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Dana Large Cap and Aqr Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aqr Small Cap and Dana 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 Dana Large Cap are associated (or correlated) with Aqr Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aqr Small Cap has no effect on the direction of Dana Large i.e., Dana Large and Aqr Small go up and down completely randomly.
Pair Corralation between Dana Large and Aqr Small
Assuming the 90 days horizon Dana Large Cap is expected to generate 0.53 times more return on investment than Aqr Small. However, Dana Large Cap is 1.87 times less risky than Aqr Small. It trades about 0.12 of its potential returns per unit of risk. Aqr Small Cap is currently generating about 0.06 per unit of risk. If you would invest 1,987 in Dana Large Cap on September 12, 2024 and sell it today you would earn a total of 715.00 from holding Dana Large Cap or generate 35.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dana Large Cap vs. Aqr Small Cap
Performance |
| Timeline |
| Dana Large Cap |
| Aqr Small Cap |
Dana Large and Aqr Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dana Large and Aqr Small
The main advantage of trading using opposite Dana Large and Aqr Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dana Large position performs unexpectedly, Aqr Small 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 Aqr Small will offset losses from the drop in Aqr Small's long position.| Dana Large vs. Intermediate Government Bond | Dana Large vs. Prudential Government Income | Dana Large vs. Us Government Securities | Dana Large vs. Virtus Seix Government |
| Aqr Small vs. Dunham Large Cap | Aqr Small vs. Jhancock Disciplined Value | Aqr Small vs. Fidelity Series 1000 | Aqr Small vs. Dana Large Cap |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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