Correlation Between Aqr Small and Federated Kaufmann
Can any of the company-specific risk be diversified away by investing in both Aqr Small and Federated Kaufmann 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 Federated Kaufmann 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 Federated Kaufmann Large, you can compare the effects of market volatilities on Aqr Small and Federated Kaufmann 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 Federated Kaufmann. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aqr Small and Federated Kaufmann.
Diversification Opportunities for Aqr Small and Federated Kaufmann
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Aqr and Federated is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Aqr Small Cap and Federated Kaufmann Large in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated Kaufmann Large 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 Federated Kaufmann. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federated Kaufmann Large has no effect on the direction of Aqr Small i.e., Aqr Small and Federated Kaufmann go up and down completely randomly.
Pair Corralation between Aqr Small and Federated Kaufmann
Assuming the 90 days horizon Aqr Small Cap is expected to generate 0.95 times more return on investment than Federated Kaufmann. However, Aqr Small Cap is 1.05 times less risky than Federated Kaufmann. It trades about 0.1 of its potential returns per unit of risk. Federated Kaufmann Large is currently generating about 0.09 per unit of risk. If you would invest 1,593 in Aqr Small Cap on June 4, 2025 and sell it today you would earn a total of 327.00 from holding Aqr Small Cap or generate 20.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aqr Small Cap vs. Federated Kaufmann Large
Performance |
| Timeline |
| Aqr Small Cap |
| Federated Kaufmann Large |
Aqr Small and Federated Kaufmann Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aqr Small and Federated Kaufmann
The main advantage of trading using opposite Aqr Small and Federated Kaufmann positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aqr Small position performs unexpectedly, Federated Kaufmann 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 Federated Kaufmann will offset losses from the drop in Federated Kaufmann's long position.| Aqr Small vs. Janus Venture Fund | Aqr Small vs. Pgim Jennison Natural | Aqr Small vs. Blackrock Lifepath Esg | Aqr Small vs. One Choice 2055 |
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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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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