Correlation Between Fisher Large and Aqr Equity

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Can any of the company-specific risk be diversified away by investing in both Fisher Large and Aqr Equity 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 Fisher Large and Aqr Equity into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fisher Large Cap and Aqr Equity Market, you can compare the effects of market volatilities on Fisher Large and Aqr Equity 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 Fisher Large with a short position of Aqr Equity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fisher Large and Aqr Equity.

Diversification Opportunities for Fisher Large and Aqr Equity

0.83
  Correlation Coefficient

Very poor diversification

The 3 months correlation between Fisher and Aqr is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Fisher Large Cap and Aqr Equity Market in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aqr Equity Market and Fisher 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 Fisher Large Cap are associated (or correlated) with Aqr Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aqr Equity Market has no effect on the direction of Fisher Large i.e., Fisher Large and Aqr Equity go up and down completely randomly.

Pair Corralation between Fisher Large and Aqr Equity

Assuming the 90 days horizon Fisher Large Cap is expected to generate 2.13 times more return on investment than Aqr Equity. However, Fisher Large is 2.13 times more volatile than Aqr Equity Market. It trades about 0.11 of its potential returns per unit of risk. Aqr Equity Market is currently generating about 0.2 per unit of risk. If you would invest  1,380  in Fisher Large Cap on September 12, 2024 and sell it today you would earn a total of  531.00  from holding Fisher Large Cap or generate 38.48% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthStrong
Accuracy100.0%
ValuesDaily Returns

Fisher Large Cap  vs.  Aqr Equity Market

 Performance 
       Timeline  
Fisher Large Cap 

Risk-Adjusted Performance

16 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Fisher Large Cap are ranked lower than 16 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Fisher Large may actually be approaching a critical reversion point that can send shares even higher in January 2025.
Aqr Equity Market 

Risk-Adjusted Performance

16 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Aqr Equity Market are ranked lower than 16 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Aqr Equity is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Fisher Large and Aqr Equity Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Fisher Large and Aqr Equity

The main advantage of trading using opposite Fisher Large and Aqr Equity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fisher Large position performs unexpectedly, Aqr Equity 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 Equity will offset losses from the drop in Aqr Equity's long position.
The idea behind Fisher Large Cap and Aqr Equity Market 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.

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