Correlation Between Aqr Small and Dfa Ltip
Can any of the company-specific risk be diversified away by investing in both Aqr Small and Dfa Ltip 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 Dfa Ltip 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 Dfa Ltip Portfolio, you can compare the effects of market volatilities on Aqr Small and Dfa Ltip 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 Dfa Ltip. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aqr Small and Dfa Ltip.
Diversification Opportunities for Aqr Small and Dfa Ltip
Weak diversification
The 3 months correlation between Aqr and Dfa is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Aqr Small Cap and Dfa Ltip Portfolio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dfa Ltip Portfolio 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 Dfa Ltip. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dfa Ltip Portfolio has no effect on the direction of Aqr Small i.e., Aqr Small and Dfa Ltip go up and down completely randomly.
Pair Corralation between Aqr Small and Dfa Ltip
Assuming the 90 days horizon Aqr Small Cap is expected to generate 1.4 times more return on investment than Dfa Ltip. However, Aqr Small is 1.4 times more volatile than Dfa Ltip Portfolio. It trades about 0.2 of its potential returns per unit of risk. Dfa Ltip Portfolio is currently generating about 0.11 per unit of risk. If you would invest 1,690 in Aqr Small Cap on June 13, 2025 and sell it today you would earn a total of 242.00 from holding Aqr Small Cap or generate 14.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aqr Small Cap vs. Dfa Ltip Portfolio
Performance |
| Timeline |
| Aqr Small Cap |
| Dfa Ltip Portfolio |
Aqr Small and Dfa Ltip Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aqr Small and Dfa Ltip
The main advantage of trading using opposite Aqr Small and Dfa Ltip positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aqr Small position performs unexpectedly, Dfa Ltip 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 Dfa Ltip will offset losses from the drop in Dfa Ltip's long position.| Aqr Small vs. Aqr Large Cap | Aqr Small vs. Aqr Large Cap | Aqr Small vs. Aqr International Defensive | Aqr Small vs. Aqr International Defensive |
| Dfa Ltip vs. Multimanager Lifestyle Moderate | Dfa Ltip vs. Tiaa Cref Lifecycle Retirement | Dfa Ltip vs. Mfs Lifetime Retirement | Dfa Ltip vs. Fidelity Managed Retirement |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
Other Complementary Tools
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm |