Correlation Between Siit Large and Aqr Large
Can any of the company-specific risk be diversified away by investing in both Siit Large 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 Siit Large and Aqr Large into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Siit Large Cap and Aqr Large Cap, you can compare the effects of market volatilities on Siit Large 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 Siit Large with a short position of Aqr Large. Check out your portfolio center. Please also check ongoing floating volatility patterns of Siit Large and Aqr Large.
Diversification Opportunities for Siit Large and Aqr Large
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between SIIT and Aqr is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Siit Large 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 Siit Large 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 Siit Large 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 Siit Large i.e., Siit Large and Aqr Large go up and down completely randomly.
Pair Corralation between Siit Large and Aqr Large
Assuming the 90 days horizon Siit Large Cap is expected to generate 0.7 times more return on investment than Aqr Large. However, Siit Large Cap is 1.42 times less risky than Aqr Large. It trades about 0.1 of its potential returns per unit of risk. Aqr Large Cap is currently generating about 0.04 per unit of risk. If you would invest 892.00 in Siit Large Cap on September 3, 2024 and sell it today you would earn a total of 414.00 from holding Siit Large Cap or generate 46.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Siit Large Cap vs. Aqr Large Cap
Performance |
| Timeline |
| Siit Large Cap |
| Aqr Large Cap |
Siit Large and Aqr Large Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Siit Large and Aqr Large
The main advantage of trading using opposite Siit Large and Aqr Large positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Siit Large 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.| Siit Large vs. Nuveen High Income | Siit Large vs. Ab Global Risk | Siit Large vs. Ab Global Risk | Siit Large vs. Metropolitan West High |
| Aqr Large vs. Maryland Tax Free Bond | Aqr Large vs. Ambrus Core Bond | Aqr Large vs. Transamerica Funds | Aqr Large vs. Gmo High Yield |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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