Correlation Between Aqr Small and Cardinal Small
Can any of the company-specific risk be diversified away by investing in both Aqr Small and Cardinal 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 Aqr Small and Cardinal Small into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aqr Small Cap and Cardinal Small Cap, you can compare the effects of market volatilities on Aqr Small and Cardinal 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 Aqr Small with a short position of Cardinal Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aqr Small and Cardinal Small.
Diversification Opportunities for Aqr Small and Cardinal Small
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Aqr and Cardinal is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Aqr Small Cap and Cardinal Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cardinal Small Cap and Aqr Small 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 Small Cap are associated (or correlated) with Cardinal Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cardinal Small Cap has no effect on the direction of Aqr Small i.e., Aqr Small and Cardinal Small go up and down completely randomly.
Pair Corralation between Aqr Small and Cardinal Small
Assuming the 90 days horizon Aqr Small Cap is expected to generate 1.29 times more return on investment than Cardinal Small. However, Aqr Small is 1.29 times more volatile than Cardinal Small Cap. It trades about 0.06 of its potential returns per unit of risk. Cardinal Small Cap is currently generating about 0.04 per unit of risk. If you would invest 1,394 in Aqr Small Cap on September 12, 2024 and sell it today you would earn a total of 669.00 from holding Aqr Small Cap or generate 47.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aqr Small Cap vs. Cardinal Small Cap
Performance |
| Timeline |
| Aqr Small Cap |
| Cardinal Small Cap |
Aqr Small and Cardinal Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aqr Small and Cardinal Small
The main advantage of trading using opposite Aqr Small and Cardinal Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aqr Small position performs unexpectedly, Cardinal 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 Cardinal Small will offset losses from the drop in Cardinal Small's long position.| Aqr Small vs. Dunham Large Cap | Aqr Small vs. Jhancock Disciplined Value | Aqr Small vs. Fidelity Series 1000 | Aqr Small vs. Dana Large Cap |
| Cardinal Small vs. Jennison Natural Resources | Cardinal Small vs. Tortoise Energy Independence | Cardinal Small vs. Gamco Natural Resources | Cardinal Small vs. Fidelity Advisor Energy |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
Other Complementary Tools
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges |