Correlation Between State Street and Aqr Diversified
Can any of the company-specific risk be diversified away by investing in both State Street and Aqr Diversified 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 State Street and Aqr Diversified into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between State Street Smallmid and Aqr Diversified Arbitrage, you can compare the effects of market volatilities on State Street and Aqr Diversified 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 State Street with a short position of Aqr Diversified. Check out your portfolio center. Please also check ongoing floating volatility patterns of State Street and Aqr Diversified.
Diversification Opportunities for State Street and Aqr Diversified
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between State and Aqr is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding State Street Smallmid and Aqr Diversified Arbitrage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aqr Diversified Arbitrage and State Street 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 State Street Smallmid are associated (or correlated) with Aqr Diversified. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aqr Diversified Arbitrage has no effect on the direction of State Street i.e., State Street and Aqr Diversified go up and down completely randomly.
Pair Corralation between State Street and Aqr Diversified
Assuming the 90 days horizon State Street Smallmid is expected to generate 6.69 times more return on investment than Aqr Diversified. However, State Street is 6.69 times more volatile than Aqr Diversified Arbitrage. It trades about 0.29 of its potential returns per unit of risk. Aqr Diversified Arbitrage is currently generating about -0.17 per unit of risk. If you would invest 29,150 in State Street Smallmid on September 3, 2024 and sell it today you would earn a total of 4,090 from holding State Street Smallmid or generate 14.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
State Street Smallmid vs. Aqr Diversified Arbitrage
Performance |
| Timeline |
| State Street Smallmid |
| Aqr Diversified Arbitrage |
State Street and Aqr Diversified Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with State Street and Aqr Diversified
The main advantage of trading using opposite State Street and Aqr Diversified positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if State Street position performs unexpectedly, Aqr Diversified 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 Diversified will offset losses from the drop in Aqr Diversified's long position.| State Street vs. Aqr Diversified Arbitrage | State Street vs. Evaluator Conservative Rms | State Street vs. Pgim Conservative Retirement | State Street vs. Massmutual Select Diversified |
| Aqr Diversified vs. Eip Growth And | Aqr Diversified vs. Mid Cap Growth | Aqr Diversified vs. Smallcap Growth Fund | Aqr Diversified vs. Qs Growth Fund |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
Other Complementary Tools
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. |