Correlation Between Us Small and Aqr Large
Can any of the company-specific risk be diversified away by investing in both Us Small and Aqr Large 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 Us Small and Aqr Large into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Us Small Cap and Aqr Large Cap, you can compare the effects of market volatilities on Us Small and Aqr Large 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 Us Small with a short position of Aqr Large. Check out your portfolio center. Please also check ongoing floating volatility patterns of Us Small and Aqr Large.
Diversification Opportunities for Us Small and Aqr Large
Almost no diversification
The 3 months correlation between RLESX and Aqr is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Us Small Cap and Aqr Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aqr Large Cap and Us 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 Us Small Cap are associated (or correlated) with Aqr Large. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aqr Large Cap has no effect on the direction of Us Small i.e., Us Small and Aqr Large go up and down completely randomly.
Pair Corralation between Us Small and Aqr Large
Assuming the 90 days horizon Us Small is expected to generate 1.15 times less return on investment than Aqr Large. In addition to that, Us Small is 1.04 times more volatile than Aqr Large Cap. It trades about 0.06 of its total potential returns per unit of risk. Aqr Large Cap is currently generating about 0.08 per unit of volatility. If you would invest 1,936 in Aqr Large Cap on September 2, 2024 and sell it today you would earn a total of 645.00 from holding Aqr Large Cap or generate 33.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Us Small Cap vs. Aqr Large Cap
Performance |
| Timeline |
| Us Small Cap |
| Aqr Large Cap |
Us Small and Aqr Large Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Us Small and Aqr Large
The main advantage of trading using opposite Us Small and Aqr Large positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Us Small position performs unexpectedly, Aqr Large 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 Aqr Large will offset losses from the drop in Aqr Large's long position.| Us Small vs. Franklin Natural Resources | Us Small vs. Gamco Natural Resources | Us Small vs. Dreyfus Natural Resources | Us Small vs. Gmo Resources |
| Aqr Large vs. Aqr Long Short Equity | Aqr Large vs. Old Westbury Short Term | Aqr Large vs. Federated Ultrashort Bond | Aqr Large vs. Sterling Capital Short |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
Other Complementary Tools
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account |