Correlation Between Northern Small and Aqr Style
Can any of the company-specific risk be diversified away by investing in both Northern Small and Aqr Style 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 Northern Small and Aqr Style into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Northern Small Cap and Aqr Style Premia, you can compare the effects of market volatilities on Northern Small and Aqr Style 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 Northern Small with a short position of Aqr Style. Check out your portfolio center. Please also check ongoing floating volatility patterns of Northern Small and Aqr Style.
Diversification Opportunities for Northern Small and Aqr Style
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Northern and Aqr is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Northern Small Cap and Aqr Style Premia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aqr Style Premia and Northern Small 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 Northern Small Cap are associated (or correlated) with Aqr Style. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aqr Style Premia has no effect on the direction of Northern Small i.e., Northern Small and Aqr Style go up and down completely randomly.
Pair Corralation between Northern Small and Aqr Style
If you would invest 1,121 in Northern Small Cap on December 2, 2024 and sell it today you would earn a total of 231.00 from holding Northern Small Cap or generate 20.61% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Flat |
Strength | Insignificant |
Accuracy | 0.0% |
Values | Daily Returns |
Northern Small Cap vs. Aqr Style Premia
Performance |
Timeline |
Northern Small Cap |
Aqr Style Premia |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
Northern Small and Aqr Style Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Northern Small and Aqr Style
The main advantage of trading using opposite Northern Small and Aqr Style positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Northern Small position performs unexpectedly, Aqr Style 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 Style will offset losses from the drop in Aqr Style's long position.Northern Small vs. Wmcanx | Northern Small vs. Ffcdax | Northern Small vs. Fxybjx | Northern Small vs. Fzdaqx |
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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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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