Correlation Between Aqr Sustainable and Mid-cap Profund

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

By analyzing existing cross correlation between Aqr Sustainable Long Short and Mid Cap Profund Mid Cap, you can compare the effects of market volatilities on Aqr Sustainable and Mid-cap Profund 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 Sustainable with a short position of Mid-cap Profund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aqr Sustainable and Mid-cap Profund.

Diversification Opportunities for Aqr Sustainable and Mid-cap Profund

0.83

Correlation Coefficient

Aqr Sustainable  Mid-cap Profund

Very poor diversification

The 3 months correlation between Aqr and Mid-cap is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Aqr Sustainable Long Short and Mid Cap Profund Mid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mid Cap Profund and Aqr Sustainable 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 Sustainable Long Short are associated (or correlated) with Mid-cap Profund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mid Cap Profund has no effect on the direction of Aqr Sustainable i.e., Aqr Sustainable and Mid-cap Profund go up and down completely randomly.

Pair Corralation between Aqr Sustainable and Mid-cap Profund

Assuming the 90 days horizon Aqr Sustainable is expected to generate 1.47 times less return on investment than Mid-cap Profund. But when comparing it to its historical volatility, Aqr Sustainable Long Short is 1.84 times less risky than Mid-cap Profund. It trades about 0.2 of its potential returns per unit of risk. Mid Cap Profund Mid Cap is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  11,588  in Mid Cap Profund Mid Cap on May 3, 2025 and sell it today you would earn a total of  1,098  from holding Mid Cap Profund Mid Cap or generate 9.48% return on investment over 90 days.

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

Aqr Sustainable Long Short  vs.  Mid Cap Profund Mid Cap

Aqr Sustainable Long

Risk-Adjusted Performance

Good

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

Mid Cap Profund

Risk-Adjusted Performance

Good

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

Pair Trading with Aqr Sustainable and Mid-cap Profund

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

The idea behind Aqr Sustainable Long Short and Mid Cap Profund Mid 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.