Correlation Between Aqr Sustainable and Aqr Tm

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

Diversification Opportunities for Aqr Sustainable and Aqr Tm

0.91

Correlation Coefficient

Aqr Sustainable  Aqr Tm

Almost no diversification

The 3 months correlation between Aqr and Aqr is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Aqr Sustainable Long Short and Aqr Tm Emerging in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aqr Tm Emerging 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 Aqr Tm. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aqr Tm Emerging has no effect on the direction of Aqr Sustainable i.e., Aqr Sustainable and Aqr Tm go up and down completely randomly.

Pair Corralation between Aqr Sustainable and Aqr Tm

Assuming the 90 days horizon Aqr Sustainable Long Short is expected to generate 1.1 times more return on investment than Aqr Tm. However, Aqr Sustainable is 1.1 times more volatile than Aqr Tm Emerging. It trades about -0.07 of its potential returns per unit of risk. Aqr Tm Emerging is currently generating about -0.11 per unit of risk. If you would invest  1,404  in Aqr Sustainable Long Short on May 6, 2025 and sell it today you would lose (14.00) from holding Aqr Sustainable Long Short or give up 1.0% of portfolio value over 90 days.

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

Aqr Sustainable Long Short  vs.  Aqr Tm Emerging

Aqr Sustainable Long

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Aqr Sustainable Long Short are ranked lower than 8 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Aqr Sustainable is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Aqr Tm Emerging

Risk-Adjusted Performance

Good

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

Pair Trading with Aqr Sustainable and Aqr Tm

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

The idea behind Aqr Sustainable Long Short and Aqr Tm Emerging 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.