Correlation Between Aqr Sustainable and Aqr Tm
Can any of the company-specific risk be diversified away by investing in both Aqr Sustainable and Aqr Tm 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 Sustainable and Aqr Tm into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aqr Sustainable Long Short and Aqr Tm Emerging, you can compare the effects of market volatilities on Aqr Sustainable and Aqr Tm 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 Sustainable with a short position of Aqr Tm. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aqr Sustainable and Aqr Tm.
Diversification Opportunities for Aqr Sustainable and Aqr Tm
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Aqr and Aqr is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Aqr Sustainable Long Short and Aqr Tm Emerging in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aqr Tm Emerging and Aqr Sustainable 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 Sustainable Long Short are associated (or correlated) with Aqr Tm. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aqr Tm Emerging has no effect on the direction of Aqr Sustainable i.e., Aqr Sustainable and Aqr Tm go up and down completely randomly.
Pair Corralation between Aqr Sustainable and Aqr Tm
Assuming the 90 days horizon Aqr Sustainable is expected to generate 1.06 times less return on investment than Aqr Tm. But when comparing it to its historical volatility, Aqr Sustainable Long Short is 1.16 times less risky than Aqr Tm. It trades about 0.17 of its potential returns per unit of risk. Aqr Tm Emerging is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 1,206 in Aqr Tm Emerging on August 29, 2025 and sell it today you would earn a total of 115.00 from holding Aqr Tm Emerging or generate 9.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aqr Sustainable Long Short vs. Aqr Tm Emerging
Performance |
| Timeline |
| Aqr Sustainable Long |
| Aqr Tm Emerging |
Aqr Sustainable and Aqr Tm Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aqr Sustainable and Aqr Tm
The main advantage of trading using opposite Aqr Sustainable and Aqr Tm positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aqr Sustainable position performs unexpectedly, Aqr Tm 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 Tm will offset losses from the drop in Aqr Tm's long position.| Aqr Sustainable vs. Aqr Large Cap | Aqr Sustainable vs. Aqr International Defensive | Aqr Sustainable vs. Aqr International Defensive | Aqr Sustainable vs. Aqr Long Short Equity |
| Aqr Tm vs. Aqr Large Cap | Aqr Tm vs. Aqr Large Cap | Aqr Tm vs. Aqr International Defensive | Aqr Tm vs. Aqr International Defensive |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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