Correlation Between Aqr Small and Dataax

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

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

Diversification Opportunities for Aqr Small and Dataax

0.9

Correlation Coefficient

Aqr Small  Dataax

Almost no diversification

The 3 months correlation between Aqr and Dataax is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Aqr Small Cap and Dataax in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dataax and Aqr Small 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 Small Cap are associated (or correlated) with Dataax. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dataax has no effect on the direction of Aqr Small i.e., Aqr Small and Dataax go up and down completely randomly.

Pair Corralation between Aqr Small and Dataax

Assuming the 90 days horizon Aqr Small is expected to generate 2.14 times less return on investment than Dataax. In addition to that, Aqr Small is 1.07 times more volatile than Dataax. It trades about 0.1 of its total potential returns per unit of risk. Dataax is currently generating about 0.23 per unit of volatility. If you would invest  927.00  in Dataax on May 13, 2025 and sell it today you would earn a total of  133.00  from holding Dataax or generate 14.35% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	95.16%
Values	Daily Returns

Aqr Small Cap  vs.  Dataax

Aqr Small Cap

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Aqr Small Cap are ranked lower than 7 (%) 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.

Dataax

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Dataax are ranked lower than 17 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Dataax showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Aqr Small and Dataax

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

The idea behind Aqr Small Cap and Dataax 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.