Correlation Between Aqr Long and Queens Road

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Aqr Long and Queens Road 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 Long and Queens Road into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aqr Long Short Equity and Queens Road Small, you can compare the effects of market volatilities on Aqr Long and Queens Road 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 Long with a short position of Queens Road. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aqr Long and Queens Road.

Diversification Opportunities for Aqr Long and Queens Road

0.91
  Correlation Coefficient

Almost no diversification

The 3 months correlation between Aqr and Queens is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Aqr Long Short Equity and Queens Road Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Queens Road Small and Aqr Long 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 Long Short Equity are associated (or correlated) with Queens Road. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Queens Road Small has no effect on the direction of Aqr Long i.e., Aqr Long and Queens Road go up and down completely randomly.

Pair Corralation between Aqr Long and Queens Road

Assuming the 90 days horizon Aqr Long Short Equity is expected to generate 0.51 times more return on investment than Queens Road. However, Aqr Long Short Equity is 1.98 times less risky than Queens Road. It trades about 0.19 of its potential returns per unit of risk. Queens Road Small is currently generating about 0.06 per unit of risk. If you would invest  1,040  in Aqr Long Short Equity on September 13, 2024 and sell it today you would earn a total of  620.00  from holding Aqr Long Short Equity or generate 59.62% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Strong
Accuracy100.0%
ValuesDaily Returns

Aqr Long Short Equity  vs.  Queens Road Small

 Performance 
       Timeline  
Aqr Long Short 

Risk-Adjusted Performance

18 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Aqr Long Short Equity are ranked lower than 18 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Aqr Long may actually be approaching a critical reversion point that can send shares even higher in January 2025.
Queens Road Small 

Risk-Adjusted Performance

13 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Queens Road Small are ranked lower than 13 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Queens Road may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Aqr Long and Queens Road Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Aqr Long and Queens Road

The main advantage of trading using opposite Aqr Long and Queens Road positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aqr Long position performs unexpectedly, Queens Road 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 Queens Road will offset losses from the drop in Queens Road's long position.
The idea behind Aqr Long Short Equity and Queens Road Small 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.
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.

Other Complementary Tools

ETF Categories
List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments
Fundamentals Comparison
Compare fundamentals across multiple equities to find investing opportunities
Volatility Analysis
Get historical volatility and risk analysis based on latest market data
Financial Widgets
Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets
Piotroski F Score
Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals