Correlation Between Aqr Large and Disciplined Growth

Can any of the company-specific risk be diversified away by investing in both Aqr Large and Disciplined Growth 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 Disciplined Growth 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 Disciplined Growth Fund, you can compare the effects of market volatilities on Aqr Large and Disciplined Growth 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 Disciplined Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aqr Large and Disciplined Growth.

Diversification Opportunities for Aqr Large and Disciplined Growth

0.97

Correlation Coefficient

Aqr Large  Disciplined Growth

Almost no diversification

The 3 months correlation between Aqr and Disciplined is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Aqr Large Cap and Disciplined Growth Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Disciplined Growth 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 Disciplined Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Disciplined Growth has no effect on the direction of Aqr Large i.e., Aqr Large and Disciplined Growth go up and down completely randomly.

Pair Corralation between Aqr Large and Disciplined Growth

Assuming the 90 days horizon Aqr Large is expected to generate 1.42 times less return on investment than Disciplined Growth. But when comparing it to its historical volatility, Aqr Large Cap is 1.24 times less risky than Disciplined Growth. It trades about 0.17 of its potential returns per unit of risk. Disciplined Growth Fund is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest  1,772  in Disciplined Growth Fund on July 31, 2025 and sell it today you would earn a total of  203.00  from holding Disciplined Growth Fund or generate 11.46% return on investment over 90 days.

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

Aqr Large Cap  vs.  Disciplined Growth Fund

Aqr Large Cap

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Aqr Large Cap are ranked lower than 13 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Aqr Large may actually be approaching a critical reversion point that can send shares even higher in November 2025.

Disciplined Growth

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Disciplined Growth Fund are ranked lower than 15 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental indicators, Disciplined Growth may actually be approaching a critical reversion point that can send shares even higher in November 2025.

Pair Trading with Aqr Large and Disciplined Growth

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

The idea behind Aqr Large Cap and Disciplined Growth Fund 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.