Correlation Between Deutsche and Aqr Small
Can any of the company-specific risk be diversified away by investing in both Deutsche and Aqr 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 Deutsche and Aqr Small into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Deutsche Sp 500 and Aqr Small Cap, you can compare the effects of market volatilities on Deutsche and Aqr 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 Deutsche with a short position of Aqr Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Deutsche and Aqr Small.
Diversification Opportunities for Deutsche and Aqr Small
Very poor diversification
The 3 months correlation between Deutsche and Aqr is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Deutsche Sp 500 and Aqr Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aqr Small Cap and Deutsche 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 Deutsche Sp 500 are associated (or correlated) with Aqr Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aqr Small Cap has no effect on the direction of Deutsche i.e., Deutsche and Aqr Small go up and down completely randomly.
Pair Corralation between Deutsche and Aqr Small
Assuming the 90 days horizon Deutsche Sp 500 is expected to generate 0.52 times more return on investment than Aqr Small. However, Deutsche Sp 500 is 1.92 times less risky than Aqr Small. It trades about 0.17 of its potential returns per unit of risk. Aqr Small Cap is currently generating about -0.04 per unit of risk. If you would invest 5,107 in Deutsche Sp 500 on September 13, 2024 and sell it today you would earn a total of 92.00 from holding Deutsche Sp 500 or generate 1.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Deutsche Sp 500 vs. Aqr Small Cap
Performance |
| Timeline |
| Deutsche Sp 500 |
| Aqr Small Cap |
Deutsche and Aqr Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Deutsche and Aqr Small
The main advantage of trading using opposite Deutsche and Aqr Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Deutsche position performs unexpectedly, Aqr 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 Aqr Small will offset losses from the drop in Aqr Small's long position.| Deutsche vs. Artisan High Income | Deutsche vs. Ambrus Core Bond | Deutsche vs. Alliancebernstein Bond | Deutsche vs. Franklin High Yield |
| Aqr Small vs. Eagle Mlp Strategy | Aqr Small vs. Origin Emerging Markets | Aqr Small vs. Pnc Emerging Markets | Aqr Small vs. Mid Cap 15x Strategy |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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