Correlation Between Aqr Small and Smallcap Growth
Can any of the company-specific risk be diversified away by investing in both Aqr Small and Smallcap Growth 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 Smallcap Growth 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 Smallcap Growth Fund, you can compare the effects of market volatilities on Aqr Small and Smallcap Growth 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 Smallcap Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aqr Small and Smallcap Growth.
Diversification Opportunities for Aqr Small and Smallcap Growth
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Aqr and Smallcap is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Aqr Small Cap and Smallcap Growth Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Smallcap Growth 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 Smallcap Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Smallcap Growth has no effect on the direction of Aqr Small i.e., Aqr Small and Smallcap Growth go up and down completely randomly.
Pair Corralation between Aqr Small and Smallcap Growth
Assuming the 90 days horizon Aqr Small Cap is expected to generate 1.23 times more return on investment than Smallcap Growth. However, Aqr Small is 1.23 times more volatile than Smallcap Growth Fund. It trades about 0.07 of its potential returns per unit of risk. Smallcap Growth Fund is currently generating about 0.07 per unit of risk. If you would invest 1,542 in Aqr Small Cap on September 12, 2024 and sell it today you would earn a total of 521.00 from holding Aqr Small Cap or generate 33.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aqr Small Cap vs. Smallcap Growth Fund
Performance |
| Timeline |
| Aqr Small Cap |
| Smallcap Growth |
Aqr Small and Smallcap Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aqr Small and Smallcap Growth
The main advantage of trading using opposite Aqr Small and Smallcap Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aqr Small position performs unexpectedly, Smallcap Growth 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 Smallcap Growth will offset losses from the drop in Smallcap Growth'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 |
| Smallcap Growth vs. Allianzgi Diversified Income | Smallcap Growth vs. Global Diversified Income | Smallcap Growth vs. Aqr Diversified Arbitrage | Smallcap Growth vs. Guggenheim Diversified Income |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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