Correlation Between Ab Select and Aqr Small
Can any of the company-specific risk be diversified away by investing in both Ab Select and Aqr 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 Ab Select and Aqr Small into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ab Select Equity and Aqr Small Cap, you can compare the effects of market volatilities on Ab Select and Aqr 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 Ab Select with a short position of Aqr Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Select and Aqr Small.
Diversification Opportunities for Ab Select and Aqr Small
Poor diversification
The 3 months correlation between AUUYX and Aqr is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Ab Select Equity and Aqr Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aqr Small Cap and Ab Select 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 Ab Select Equity are associated (or correlated) with Aqr Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aqr Small Cap has no effect on the direction of Ab Select i.e., Ab Select and Aqr Small go up and down completely randomly.
Pair Corralation between Ab Select and Aqr Small
Assuming the 90 days horizon Ab Select is expected to generate 1.48 times less return on investment than Aqr Small. But when comparing it to its historical volatility, Ab Select Equity is 2.14 times less risky than Aqr Small. It trades about 0.26 of its potential returns per unit of risk. Aqr Small Cap is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 1,675 in Aqr Small Cap on June 2, 2025 and sell it today you would earn a total of 240.00 from holding Aqr Small Cap or generate 14.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ab Select Equity vs. Aqr Small Cap
Performance |
| Timeline |
| Ab Select Equity |
| Aqr Small Cap |
Ab Select and Aqr Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ab Select and Aqr Small
The main advantage of trading using opposite Ab Select and Aqr Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Select position performs unexpectedly, Aqr 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 Aqr Small will offset losses from the drop in Aqr Small's long position.| Ab Select vs. Mh Elite Fund | Ab Select vs. Eagle Growth Income | Ab Select vs. Qs Moderate Growth | Ab Select vs. Tax Managed Large Cap |
| Aqr Small vs. Guidemark E Fixed | Aqr Small vs. Versatile Bond Portfolio | Aqr Small vs. Morningstar Defensive Bond | Aqr Small vs. Ambrus Core Bond |
Check out your portfolio center.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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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