Correlation Between Aqr Large and Sgi Peak

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

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

Diversification Opportunities for Aqr Large and Sgi Peak

0.77

Correlation Coefficient

Aqr Large  Sgi Peak

Poor diversification

The 3 months correlation between Aqr and Sgi is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Aqr Large Cap and Sgi Peak Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sgi Peak Growth and Aqr Large 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 Large Cap are associated (or correlated) with Sgi Peak. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sgi Peak Growth has no effect on the direction of Aqr Large i.e., Aqr Large and Sgi Peak go up and down completely randomly.

Pair Corralation between Aqr Large and Sgi Peak

Assuming the 90 days horizon Aqr Large Cap is expected to under-perform the Sgi Peak. In addition to that, Aqr Large is 1.81 times more volatile than Sgi Peak Growth. It trades about -0.02 of its total potential returns per unit of risk. Sgi Peak Growth is currently generating about 0.05 per unit of volatility. If you would invest  983.00  in Sgi Peak Growth on October 23, 2024 and sell it today you would earn a total of  188.00  from holding Sgi Peak Growth or generate 19.13% return on investment over 90 days.

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

Aqr Large Cap  vs.  Sgi Peak Growth

Aqr Large Cap

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Aqr Large 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 basic indicators remain fairly strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Sgi Peak Growth

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Sgi Peak Growth are ranked lower than 1 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward-looking signals, Sgi Peak 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 Large and Sgi Peak

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

The idea behind Aqr Large Cap and Sgi Peak Growth 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.