Correlation Between Dws Government and Aqr Small

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

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

Diversification Opportunities for Dws Government and Aqr Small

0.0

Correlation Coefficient

Dws Government  Aqr Small

Pay attention - limited upside

The 3 months correlation between Dws and Aqr is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Dws Government Money 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 Dws Government 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 Dws Government Money 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 Dws Government i.e., Dws Government and Aqr Small go up and down completely randomly.

Pair Corralation between Dws Government and Aqr Small

If you would invest  100.00  in Dws Government Money on December 11, 2024 and sell it today you would earn a total of  0.00  from holding Dws Government Money or generate 0.0% return on investment over 90 days.

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

Dws Government Money  vs.  Aqr Small Cap

Dws Government Money

Risk-Adjusted Performance

Very Weak

Over the last 90 days Dws Government Money has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Dws Government is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Aqr Small Cap

Risk-Adjusted Performance

Very Weak

Over the last 90 days Aqr Small Cap has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's basic indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Pair Trading with Dws Government and Aqr Small

The main advantage of trading using opposite Dws Government and Aqr Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dws Government 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.

The idea behind Dws Government Money and Aqr Small Cap 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.

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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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.