Correlation Between Aqr Small and Vy(r) T

Can any of the company-specific risk be diversified away by investing in both Aqr Small and Vy(r) T 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 Vy(r) T 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 Vy T Rowe, you can compare the effects of market volatilities on Aqr Small and Vy(r) T 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 Vy(r) T. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aqr Small and Vy(r) T.

Diversification Opportunities for Aqr Small and Vy(r) T

0.97

Correlation Coefficient

Aqr Small  Vy(r) T

Almost no diversification

The 3 months correlation between Aqr and Vy(r) is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Aqr Small Cap and Vy T Rowe in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vy T Rowe 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 Vy(r) T. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vy T Rowe has no effect on the direction of Aqr Small i.e., Aqr Small and Vy(r) T go up and down completely randomly.

Pair Corralation between Aqr Small and Vy(r) T

Assuming the 90 days horizon Aqr Small is expected to generate 1.22 times less return on investment than Vy(r) T. In addition to that, Aqr Small is 1.02 times more volatile than Vy T Rowe. It trades about 0.29 of its total potential returns per unit of risk. Vy T Rowe is currently generating about 0.36 per unit of volatility. If you would invest  745.00  in Vy T Rowe on April 21, 2025 and sell it today you would earn a total of  206.00  from holding Vy T Rowe or generate 27.65% return on investment over 90 days.

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

Aqr Small Cap  vs.  Vy T Rowe

Aqr Small Cap

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Aqr Small Cap are ranked lower than 22 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly abnormal basic indicators, Aqr Small showed solid returns over the last few months and may actually be approaching a breakup point.

Vy T Rowe

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Vy T Rowe are ranked lower than 27 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Vy(r) T showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Aqr Small and Vy(r) T

The main advantage of trading using opposite Aqr Small and Vy(r) T positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aqr Small position performs unexpectedly, Vy(r) T 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 Vy(r) T will offset losses from the drop in Vy(r) T's long position.

The idea behind Aqr Small Cap and Vy T Rowe 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.