Correlation Between Aqr Diversified and Simt Large
Can any of the company-specific risk be diversified away by investing in both Aqr Diversified and Simt Large 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 Diversified and Simt Large into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aqr Diversified Arbitrage and Simt Large Cap, you can compare the effects of market volatilities on Aqr Diversified and Simt Large 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 Diversified with a short position of Simt Large. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aqr Diversified and Simt Large.
Diversification Opportunities for Aqr Diversified and Simt Large
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Aqr and Simt is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Aqr Diversified Arbitrage and Simt Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Simt Large Cap and Aqr Diversified 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 Diversified Arbitrage are associated (or correlated) with Simt Large. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Simt Large Cap has no effect on the direction of Aqr Diversified i.e., Aqr Diversified and Simt Large go up and down completely randomly.
Pair Corralation between Aqr Diversified and Simt Large
Assuming the 90 days horizon Aqr Diversified is expected to generate 5.91 times less return on investment than Simt Large. But when comparing it to its historical volatility, Aqr Diversified Arbitrage is 9.35 times less risky than Simt Large. It trades about 0.33 of its potential returns per unit of risk. Simt Large Cap is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 2,483 in Simt Large Cap on April 30, 2025 and sell it today you would earn a total of 264.00 from holding Simt Large Cap or generate 10.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aqr Diversified Arbitrage vs. Simt Large Cap
Performance |
| Timeline |
| Aqr Diversified Arbitrage |
| Simt Large Cap |
Aqr Diversified and Simt Large Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aqr Diversified and Simt Large
The main advantage of trading using opposite Aqr Diversified and Simt Large positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aqr Diversified position performs unexpectedly, Simt Large 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 Simt Large will offset losses from the drop in Simt Large's long position.| Aqr Diversified vs. Western Asset Short | Aqr Diversified vs. Short Term Municipal Bond | Aqr Diversified vs. American Funds Tax Exempt | Aqr Diversified vs. Blackrock Global Longshort |
| Simt Large vs. Madison Diversified Income | Simt Large vs. Columbia Diversified Equity | Simt Large vs. Timothy Plan Conservative | Simt Large vs. Global Diversified Income |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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