Correlation Between State Street and Aqr Style
Can any of the company-specific risk be diversified away by investing in both State Street and Aqr Style 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 State Street and Aqr Style into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between State Street Master and Aqr Style Premia, you can compare the effects of market volatilities on State Street and Aqr Style 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 State Street with a short position of Aqr Style. Check out your portfolio center. Please also check ongoing floating volatility patterns of State Street and Aqr Style.
Diversification Opportunities for State Street and Aqr Style
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between State and Aqr is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding State Street Master and Aqr Style Premia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aqr Style Premia and State Street 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 State Street Master are associated (or correlated) with Aqr Style. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aqr Style Premia has no effect on the direction of State Street i.e., State Street and Aqr Style go up and down completely randomly.
Pair Corralation between State Street and Aqr Style
If you would invest 764.00 in Aqr Style Premia on October 24, 2024 and sell it today you would earn a total of 25.00 from holding Aqr Style Premia or generate 3.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 90.0% |
| Values | Daily Returns |
State Street Master vs. Aqr Style Premia
Performance |
| Timeline |
| State Street Master |
| Aqr Style Premia |
State Street and Aqr Style Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with State Street and Aqr Style
The main advantage of trading using opposite State Street and Aqr Style positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if State Street position performs unexpectedly, Aqr Style 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 Style will offset losses from the drop in Aqr Style's long position.| State Street vs. Vanguard Total Stock | State Street vs. Vanguard 500 Index | State Street vs. Vanguard Total Stock | State Street vs. Vanguard Total Stock |
| Aqr Style vs. State Street Master | Aqr Style vs. Prudential Government Money | Aqr Style vs. Aig Government Money | Aqr Style vs. Schwab Government Money |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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