Correlation Between Aqr Small and Congressional Effect
Can any of the company-specific risk be diversified away by investing in both Aqr Small and Congressional Effect 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 Congressional Effect 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 Congressional Effect Fund, you can compare the effects of market volatilities on Aqr Small and Congressional Effect 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 Congressional Effect. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aqr Small and Congressional Effect.
Diversification Opportunities for Aqr Small and Congressional Effect
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Aqr and Congressional is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Aqr Small Cap and Congressional Effect Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Congressional Effect 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 Congressional Effect. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Congressional Effect has no effect on the direction of Aqr Small i.e., Aqr Small and Congressional Effect go up and down completely randomly.
Pair Corralation between Aqr Small and Congressional Effect
Assuming the 90 days horizon Aqr Small Cap is expected to generate 1.75 times more return on investment than Congressional Effect. However, Aqr Small is 1.75 times more volatile than Congressional Effect Fund. It trades about 0.06 of its potential returns per unit of risk. Congressional Effect Fund is currently generating about 0.06 per unit of risk. If you would invest 1,405 in Aqr Small Cap on September 13, 2024 and sell it today you would earn a total of 657.00 from holding Aqr Small Cap or generate 46.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aqr Small Cap vs. Congressional Effect Fund
Performance |
| Timeline |
| Aqr Small Cap |
| Congressional Effect |
Aqr Small and Congressional Effect Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aqr Small and Congressional Effect
The main advantage of trading using opposite Aqr Small and Congressional Effect positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aqr Small position performs unexpectedly, Congressional Effect 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 Congressional Effect will offset losses from the drop in Congressional Effect's long position.| Aqr Small vs. Hennessy Bp Energy | Aqr Small vs. Gmo Resources | Aqr Small vs. Alpsalerian Energy Infrastructure | Aqr Small vs. Icon Natural Resources |
| Congressional Effect vs. Kinetics Small Cap | Congressional Effect vs. Vy Columbia Small | Congressional Effect vs. Aqr Small Cap | Congressional Effect vs. Siit Small Mid |
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
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Equity Valuation Check real value of public entities based on technical and fundamental data |