Correlation Between Aew Real and Small Cap
Can any of the company-specific risk be diversified away by investing in both Aew Real and Small Cap 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 Aew Real and Small Cap into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aew Real Estate and Small Cap Core, you can compare the effects of market volatilities on Aew Real and Small Cap 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 Aew Real with a short position of Small Cap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aew Real and Small Cap.
Diversification Opportunities for Aew Real and Small Cap
Poor diversification
The 3 months correlation between Aew and Small is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Aew Real Estate and Small Cap Core in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Small Cap Core and Aew Real 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 Aew Real Estate are associated (or correlated) with Small Cap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Small Cap Core has no effect on the direction of Aew Real i.e., Aew Real and Small Cap go up and down completely randomly.
Pair Corralation between Aew Real and Small Cap
Assuming the 90 days horizon Aew Real Estate is expected to under-perform the Small Cap. But the mutual fund apears to be less risky and, when comparing its historical volatility, Aew Real Estate is 1.49 times less risky than Small Cap. The mutual fund trades about -0.07 of its potential returns per unit of risk. The Small Cap Core is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 1,143 in Small Cap Core on April 20, 2025 and sell it today you would earn a total of 53.00 from holding Small Cap Core or generate 4.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Aew Real Estate vs. Small Cap Core
Performance |
| Timeline |
| Aew Real Estate |
| Small Cap Core |
Aew Real and Small Cap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aew Real and Small Cap
The main advantage of trading using opposite Aew Real and Small Cap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aew Real position performs unexpectedly, Small Cap 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 Small Cap will offset losses from the drop in Small Cap's long position.| Aew Real vs. Ab Select Longshort | Aew Real vs. Leader Short Term Bond | Aew Real vs. Oakhurst Short Duration | Aew Real vs. Ultra Short Term Fixed |
| Small Cap vs. Aew Real Estate | Small Cap vs. Global Real Estate | Small Cap vs. Clarion Partners Real | Small Cap vs. Redwood Real Estate |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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