Correlation Between Aqr Managed and Nuveen Small

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

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

Diversification Opportunities for Aqr Managed and Nuveen Small

-0.72

Correlation Coefficient

Aqr Managed  Nuveen Small

Pay attention - limited upside

The 3 months correlation between Aqr and Nuveen is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Aqr Managed Futures and Nuveen Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuveen Small Cap and Aqr Managed 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 Managed Futures are associated (or correlated) with Nuveen Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuveen Small Cap has no effect on the direction of Aqr Managed i.e., Aqr Managed and Nuveen Small go up and down completely randomly.

Pair Corralation between Aqr Managed and Nuveen Small

Assuming the 90 days horizon Aqr Managed Futures is expected to generate 0.63 times more return on investment than Nuveen Small. However, Aqr Managed Futures is 1.58 times less risky than Nuveen Small. It trades about 0.13 of its potential returns per unit of risk. Nuveen Small Cap is currently generating about -0.11 per unit of risk. If you would invest  833.00  in Aqr Managed Futures on December 28, 2024 and sell it today you would earn a total of  63.00  from holding Aqr Managed Futures or generate 7.56% return on investment over 90 days.

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

Aqr Managed Futures  vs.  Nuveen Small Cap

Aqr Managed Futures

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Aqr Managed Futures are ranked lower than 10 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward indicators, Aqr Managed may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Nuveen Small Cap

Risk-Adjusted Performance

Very Weak

Over the last 90 days Nuveen Small 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.

Pair Trading with Aqr Managed and Nuveen Small

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

The idea behind Aqr Managed Futures and Nuveen 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.