Correlation Between Aqr Large and Quantified Stf

Can any of the company-specific risk be diversified away by investing in both Aqr Large and Quantified Stf 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 Large and Quantified Stf into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Aqr Large Cap and Quantified Stf Fund, you can compare the effects of market volatilities on Aqr Large and Quantified Stf 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 Large with a short position of Quantified Stf. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aqr Large and Quantified Stf.

Diversification Opportunities for Aqr Large and Quantified Stf

-0.2

Correlation Coefficient

Aqr Large  Quantified Stf

Good diversification

The 3 months correlation between Aqr and Quantified is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Aqr Large Cap and Quantified Stf Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Quantified Stf and Aqr 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 Aqr Large Cap are associated (or correlated) with Quantified Stf. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Quantified Stf has no effect on the direction of Aqr Large i.e., Aqr Large and Quantified Stf go up and down completely randomly.

Pair Corralation between Aqr Large and Quantified Stf

Assuming the 90 days horizon Aqr Large is expected to generate 2.05 times less return on investment than Quantified Stf. But when comparing it to its historical volatility, Aqr Large Cap is 1.3 times less risky than Quantified Stf. It trades about 0.03 of its potential returns per unit of risk. Quantified Stf Fund is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  1,562  in Quantified Stf Fund on October 2, 2024 and sell it today you would earn a total of  228.00  from holding Quantified Stf Fund or generate 14.6% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Aqr Large Cap  vs.  Quantified Stf Fund

Aqr Large Cap

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Aqr Large Cap has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Quantified Stf

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Quantified Stf Fund are ranked lower than 2 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical and fundamental indicators, Quantified Stf is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Aqr Large and Quantified Stf

The main advantage of trading using opposite Aqr Large and Quantified Stf positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aqr Large position performs unexpectedly, Quantified Stf 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 Quantified Stf will offset losses from the drop in Quantified Stf's long position.

The idea behind Aqr Large Cap and Quantified Stf Fund pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.