Correlation Between Aqr Sustainable and Nasdaq-100 Index

Can any of the company-specific risk be diversified away by investing in both Aqr Sustainable and Nasdaq-100 Index 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 Sustainable and Nasdaq-100 Index into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Aqr Sustainable Long Short and Nasdaq 100 Index Fund, you can compare the effects of market volatilities on Aqr Sustainable and Nasdaq-100 Index 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 Sustainable with a short position of Nasdaq-100 Index. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aqr Sustainable and Nasdaq-100 Index.

Diversification Opportunities for Aqr Sustainable and Nasdaq-100 Index

-0.51

Correlation Coefficient

Aqr Sustainable  Nasdaq-100 Index

Excellent diversification

The 3 months correlation between Aqr and Nasdaq-100 is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Aqr Sustainable Long Short and Nasdaq 100 Index Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nasdaq 100 Index and Aqr Sustainable 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 Sustainable Long Short are associated (or correlated) with Nasdaq-100 Index. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nasdaq 100 Index has no effect on the direction of Aqr Sustainable i.e., Aqr Sustainable and Nasdaq-100 Index go up and down completely randomly.

Pair Corralation between Aqr Sustainable and Nasdaq-100 Index

Assuming the 90 days horizon Aqr Sustainable Long Short is expected to generate 0.48 times more return on investment than Nasdaq-100 Index. However, Aqr Sustainable Long Short is 2.07 times less risky than Nasdaq-100 Index. It trades about 0.15 of its potential returns per unit of risk. Nasdaq 100 Index Fund is currently generating about -0.01 per unit of risk. If you would invest  1,248  in Aqr Sustainable Long Short on October 25, 2024 and sell it today you would earn a total of  81.00  from holding Aqr Sustainable Long Short or generate 6.49% return on investment over 90 days.

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

Aqr Sustainable Long Short  vs.  Nasdaq 100 Index Fund

Aqr Sustainable Long

Risk-Adjusted Performance

11 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Aqr Sustainable Long Short are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward indicators, Aqr Sustainable may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Nasdaq 100 Index

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nasdaq 100 Index Fund has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward-looking signals, Nasdaq-100 Index 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 Sustainable and Nasdaq-100 Index

The main advantage of trading using opposite Aqr Sustainable and Nasdaq-100 Index positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aqr Sustainable position performs unexpectedly, Nasdaq-100 Index 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 Nasdaq-100 Index will offset losses from the drop in Nasdaq-100 Index's long position.

The idea behind Aqr Sustainable Long Short and Nasdaq 100 Index Fund 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.