Correlation Between NYSE Composite and Aqr Small
Can any of the company-specific risk be diversified away by investing in both NYSE Composite 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 NYSE Composite and Aqr Small into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Aqr Small Cap, you can compare the effects of market volatilities on NYSE Composite 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 NYSE Composite with a short position of Aqr Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Aqr Small.
Diversification Opportunities for NYSE Composite and Aqr Small
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between NYSE and Aqr is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite 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 NYSE Composite 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 NYSE Composite 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 NYSE Composite i.e., NYSE Composite and Aqr Small go up and down completely randomly.
Pair Corralation between NYSE Composite and Aqr Small
Assuming the 90 days trading horizon NYSE Composite is expected to generate 1.48 times less return on investment than Aqr Small. But when comparing it to its historical volatility, NYSE Composite is 1.93 times less risky than Aqr Small. It trades about 0.08 of its potential returns per unit of risk. Aqr Small Cap is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 1,439 in Aqr Small Cap on September 2, 2024 and sell it today you would earn a total of 645.00 from holding Aqr Small Cap or generate 44.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Aqr Small Cap
Performance |
| Timeline |
NYSE Composite and Aqr Small Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Aqr Small Cap
Pair trading matchups for Aqr Small
Pair Trading with NYSE Composite and Aqr Small
The main advantage of trading using opposite NYSE Composite and Aqr Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite 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.| NYSE Composite vs. Simon Property Group | NYSE Composite vs. Merit Medical Systems | NYSE Composite vs. Catalent | NYSE Composite vs. Titan Machinery |
| Aqr Small vs. Aqr Large Cap | Aqr Small vs. Aqr Large Cap | Aqr Small vs. Aqr International Defensive | Aqr Small vs. Aqr International Defensive |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
Other Complementary Tools
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators |