Correlation Between Aqr Global and Transamerica Large

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

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

Diversification Opportunities for Aqr Global and Transamerica Large

0.87

Correlation Coefficient

Aqr Global  Transamerica Large

Very poor diversification

The 3 months correlation between Aqr and Transamerica is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Aqr Global Macro and Transamerica Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Transamerica Large Cap and Aqr Global 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 Global Macro are associated (or correlated) with Transamerica Large. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Transamerica Large Cap has no effect on the direction of Aqr Global i.e., Aqr Global and Transamerica Large go up and down completely randomly.

Pair Corralation between Aqr Global and Transamerica Large

Assuming the 90 days horizon Aqr Global is expected to generate 12.25 times less return on investment than Transamerica Large. But when comparing it to its historical volatility, Aqr Global Macro is 1.64 times less risky than Transamerica Large. It trades about 0.03 of its potential returns per unit of risk. Transamerica Large Cap is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest  1,432  in Transamerica Large Cap on May 7, 2025 and sell it today you would earn a total of  139.00  from holding Transamerica Large Cap or generate 9.71% return on investment over 90 days.

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

Aqr Global Macro  vs.  Transamerica Large Cap

Aqr Global Macro

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Aqr Global Macro are ranked lower than 2 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Aqr Global is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Transamerica Large Cap

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Transamerica Large Cap are ranked lower than 17 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Transamerica Large may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Aqr Global and Transamerica Large

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

The idea behind Aqr Global Macro and Transamerica Large 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..