Correlation Between Aqr Large and Fidelity Zero

Can any of the company-specific risk be diversified away by investing in both Aqr Large and Fidelity Zero 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 Large and Fidelity Zero into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Aqr Large Cap and Fidelity Zero Extended, you can compare the effects of market volatilities on Aqr Large and Fidelity Zero 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 Large with a short position of Fidelity Zero. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aqr Large and Fidelity Zero.

Diversification Opportunities for Aqr Large and Fidelity Zero

0.64

Correlation Coefficient

Aqr Large  Fidelity Zero

Poor diversification

The 3 months correlation between Aqr and Fidelity is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Aqr Large Cap and Fidelity Zero Extended in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Zero Extended and Aqr Large 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 Large Cap are associated (or correlated) with Fidelity Zero. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Zero Extended has no effect on the direction of Aqr Large i.e., Aqr Large and Fidelity Zero go up and down completely randomly.

Pair Corralation between Aqr Large and Fidelity Zero

Assuming the 90 days horizon Aqr Large Cap is expected to under-perform the Fidelity Zero. But the mutual fund apears to be less risky and, when comparing its historical volatility, Aqr Large Cap is 2.44 times less risky than Fidelity Zero. The mutual fund trades about -0.31 of its potential returns per unit of risk. The Fidelity Zero Extended is currently generating about -0.1 of returns per unit of risk over similar time horizon. If you would invest  1,519  in Fidelity Zero Extended on August 9, 2025 and sell it today you would lose (43.00) from holding Fidelity Zero Extended or give up 2.83% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Aqr Large Cap  vs.  Fidelity Zero Extended

Aqr Large Cap

Risk-Adjusted Performance

Weakest

Over the last 90 days Aqr Large Cap has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward indicators, Aqr Large is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Fidelity Zero Extended

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Fidelity Zero Extended are ranked lower than 7 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Fidelity Zero is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Aqr Large and Fidelity Zero

The main advantage of trading using opposite Aqr Large and Fidelity Zero positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aqr Large position performs unexpectedly, Fidelity Zero 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 Fidelity Zero will offset losses from the drop in Fidelity Zero's long position.

The idea behind Aqr Large Cap and Fidelity Zero Extended pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.