Correlation Between Aqr Small and Aqr Tm

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

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

Diversification Opportunities for Aqr Small and Aqr Tm

0.0

Correlation Coefficient

Aqr Small  Aqr Tm

Pay attention - limited upside

The 3 months correlation between Aqr and Aqr is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Aqr Small Cap and Aqr Tm Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aqr Tm Small and Aqr 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 Aqr Small Cap are associated (or correlated) with Aqr Tm. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aqr Tm Small has no effect on the direction of Aqr Small i.e., Aqr Small and Aqr Tm go up and down completely randomly.

Pair Corralation between Aqr Small and Aqr Tm

If you would invest (100.00) in Aqr Tm Small on August 31, 2024 and sell it today you would earn a total of  100.00  from holding Aqr Tm Small or generate -100.0% return on investment over 90 days.

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

Aqr Small Cap  vs.  Aqr Tm Small

Aqr Small Cap

Risk-Adjusted Performance

0 of 100

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 fairly strong forward indicators, Aqr Small is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Aqr Tm Small

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Aqr Tm Small has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Aqr Tm 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 Small and Aqr Tm

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

The idea behind Aqr Small Cap and Aqr Tm Small 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.