Correlation Between Aqr Global and Ultrasmall-cap Profund

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

By analyzing existing cross correlation between Aqr Global Macro and Ultrasmall Cap Profund Ultrasmall Cap, you can compare the effects of market volatilities on Aqr Global and Ultrasmall-cap Profund 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 Global with a short position of Ultrasmall-cap Profund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aqr Global and Ultrasmall-cap Profund.

Diversification Opportunities for Aqr Global and Ultrasmall-cap Profund

-0.81

Correlation Coefficient

Aqr Global  Ultrasmall-cap Profund

Pay attention - limited upside

The 3 months correlation between Aqr and Ultrasmall-cap is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Aqr Global Macro and Ultrasmall Cap Profund Ultrasm in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ultrasmall Cap Profund and Aqr Global 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 Global Macro are associated (or correlated) with Ultrasmall-cap Profund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ultrasmall Cap Profund has no effect on the direction of Aqr Global i.e., Aqr Global and Ultrasmall-cap Profund go up and down completely randomly.

Pair Corralation between Aqr Global and Ultrasmall-cap Profund

Assuming the 90 days horizon Aqr Global Macro is expected to generate 0.2 times more return on investment than Ultrasmall-cap Profund. However, Aqr Global Macro is 5.0 times less risky than Ultrasmall-cap Profund. It trades about 0.32 of its potential returns per unit of risk. Ultrasmall Cap Profund Ultrasmall Cap is currently generating about -0.11 per unit of risk. If you would invest  932.00  in Aqr Global Macro on December 22, 2024 and sell it today you would earn a total of  88.00  from holding Aqr Global Macro or generate 9.44% return on investment over 90 days.

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

Aqr Global Macro  vs.  Ultrasmall Cap Profund Ultrasm

Aqr Global Macro

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Aqr Global Macro are ranked lower than 25 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward indicators, Aqr Global may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Ultrasmall Cap Profund

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ultrasmall Cap Profund Ultrasmall 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 forward 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 Aqr Global and Ultrasmall-cap Profund

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

The idea behind Aqr Global Macro and Ultrasmall Cap Profund Ultrasmall 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.