Correlation Between Glg Intl and Aqr Small

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

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

Diversification Opportunities for Glg Intl and Aqr Small

0.96

Correlation Coefficient

Glg Intl  Aqr Small

Almost no diversification

The 3 months correlation between Glg and Aqr is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Glg Intl Small and Aqr Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aqr Small Cap and Glg Intl 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 Glg Intl Small are associated (or correlated) with Aqr Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aqr Small Cap has no effect on the direction of Glg Intl i.e., Glg Intl and Aqr Small go up and down completely randomly.

Pair Corralation between Glg Intl and Aqr Small

Assuming the 90 days horizon Glg Intl Small is expected to generate 0.87 times more return on investment than Aqr Small. However, Glg Intl Small is 1.16 times less risky than Aqr Small. It trades about 0.16 of its potential returns per unit of risk. Aqr Small Cap is currently generating about 0.11 per unit of risk. If you would invest  8,284  in Glg Intl Small on May 7, 2025 and sell it today you would earn a total of  790.00  from holding Glg Intl Small 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

Glg Intl Small  vs.  Aqr Small Cap

Glg Intl Small

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Glg Intl Small are ranked lower than 12 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward indicators, Glg Intl may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Aqr Small Cap

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Aqr Small Cap are ranked lower than 8 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Aqr Small may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Glg Intl and Aqr Small

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

The idea behind Glg Intl Small and Aqr Small Cap 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.

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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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.