Correlation Between Aqr Large and Voya Russelltm

Can any of the company-specific risk be diversified away by investing in both Aqr Large and Voya Russelltm 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 Voya Russelltm 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 Voya Russelltm Mid, you can compare the effects of market volatilities on Aqr Large and Voya Russelltm 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 Voya Russelltm. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aqr Large and Voya Russelltm.

Diversification Opportunities for Aqr Large and Voya Russelltm

-0.41

Correlation Coefficient

Aqr Large  Voya Russelltm

Very good diversification

The 3 months correlation between Aqr and Voya is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Aqr Large Cap and Voya Russelltm Mid in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voya Russelltm Mid 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 Voya Russelltm. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voya Russelltm Mid has no effect on the direction of Aqr Large i.e., Aqr Large and Voya Russelltm go up and down completely randomly.

Pair Corralation between Aqr Large and Voya Russelltm

Assuming the 90 days horizon Aqr Large is expected to generate 5.04 times less return on investment than Voya Russelltm. In addition to that, Aqr Large is 1.25 times more volatile than Voya Russelltm Mid. It trades about 0.03 of its total potential returns per unit of risk. Voya Russelltm Mid is currently generating about 0.19 per unit of volatility. If you would invest  1,161  in Voya Russelltm Mid on October 4, 2024 and sell it today you would earn a total of  25.00  from holding Voya Russelltm Mid or generate 2.15% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	2.42%
Values	Daily Returns

Aqr Large Cap  vs.  Voya Russelltm Mid

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.

Voya Russelltm Mid

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Voya Russelltm Mid has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Voya Russelltm 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 Voya Russelltm

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

The idea behind Aqr Large Cap and Voya Russelltm Mid 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.