Correlation Between Aqr Small and Scout Small
Can any of the company-specific risk be diversified away by investing in both Aqr Small and Scout 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 Scout 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 Scout Small Cap, you can compare the effects of market volatilities on Aqr Small and Scout 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 Scout Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aqr Small and Scout Small.
Diversification Opportunities for Aqr Small and Scout Small
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Aqr and Scout is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Aqr Small Cap and Scout Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scout 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 Scout Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Scout Small Cap has no effect on the direction of Aqr Small i.e., Aqr Small and Scout Small go up and down completely randomly.
Pair Corralation between Aqr Small and Scout Small
Assuming the 90 days horizon Aqr Small is expected to generate 1.08 times less return on investment than Scout Small. In addition to that, Aqr Small is 1.16 times more volatile than Scout Small Cap. It trades about 0.07 of its total potential returns per unit of risk. Scout Small Cap is currently generating about 0.08 per unit of volatility. If you would invest 2,495 in Scout Small Cap on September 12, 2024 and sell it today you would earn a total of 959.00 from holding Scout Small Cap or generate 38.44% 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. Scout Small Cap
Performance |
| Timeline |
| Aqr Small Cap |
| Scout Small Cap |
Aqr Small and Scout Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aqr Small and Scout Small
The main advantage of trading using opposite Aqr Small and Scout Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aqr Small position performs unexpectedly, Scout 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 Scout Small will offset losses from the drop in Scout 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 |
| Scout Small vs. Red Oak Technology | Scout Small vs. Biotechnology Ultrasector Profund | Scout Small vs. Icon Information Technology | Scout Small vs. Janus Global Technology |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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