Correlation Between Aqr Small and Inverse Nasdaq-100
Can any of the company-specific risk be diversified away by investing in both Aqr Small and Inverse Nasdaq-100 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 Inverse Nasdaq-100 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 Inverse Nasdaq 100 Strategy, you can compare the effects of market volatilities on Aqr Small and Inverse Nasdaq-100 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 Inverse Nasdaq-100. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aqr Small and Inverse Nasdaq-100.
Diversification Opportunities for Aqr Small and Inverse Nasdaq-100
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Aqr and Inverse is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Aqr Small Cap and Inverse Nasdaq 100 Strategy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inverse Nasdaq 100 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 Inverse Nasdaq-100. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inverse Nasdaq 100 has no effect on the direction of Aqr Small i.e., Aqr Small and Inverse Nasdaq-100 go up and down completely randomly.
Pair Corralation between Aqr Small and Inverse Nasdaq-100
Assuming the 90 days horizon Aqr Small Cap is expected to generate 1.63 times more return on investment than Inverse Nasdaq-100. However, Aqr Small is 1.63 times more volatile than Inverse Nasdaq 100 Strategy. It trades about 0.17 of its potential returns per unit of risk. Inverse Nasdaq 100 Strategy is currently generating about -0.11 per unit of risk. If you would invest 1,888 in Aqr Small Cap on August 24, 2024 and sell it today you would earn a total of 124.00 from holding Aqr Small Cap or generate 6.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Aqr Small Cap vs. Inverse Nasdaq 100 Strategy
Performance |
| Timeline |
| Aqr Small Cap |
| Inverse Nasdaq 100 |
Aqr Small and Inverse Nasdaq-100 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aqr Small and Inverse Nasdaq-100
The main advantage of trading using opposite Aqr Small and Inverse Nasdaq-100 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aqr Small position performs unexpectedly, Inverse Nasdaq-100 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 Inverse Nasdaq-100 will offset losses from the drop in Inverse Nasdaq-100's long position.| Aqr Small vs. Teton Vertible Securities | Aqr Small vs. Putnam Convertible Incm Gwth | Aqr Small vs. Virtus Convertible | Aqr Small vs. Allianzgi Vertible Fund |
| Inverse Nasdaq-100 vs. Amg River Road | Inverse Nasdaq-100 vs. Ultramid Cap Profund Ultramid Cap | Inverse Nasdaq-100 vs. Small Cap Value Series | Inverse Nasdaq-100 vs. Valic Company I |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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