Correlation Between Astor Long/short and Free Market
Can any of the company-specific risk be diversified away by investing in both Astor Long/short and Free Market 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 Astor Long/short and Free Market into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Astor Longshort Fund and Free Market International, you can compare the effects of market volatilities on Astor Long/short and Free Market 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 Astor Long/short with a short position of Free Market. Check out your portfolio center. Please also check ongoing floating volatility patterns of Astor Long/short and Free Market.
Diversification Opportunities for Astor Long/short and Free Market
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Astor and Free is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Astor Longshort Fund and Free Market International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Free Market International and Astor Long/short 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 Astor Longshort Fund are associated (or correlated) with Free Market. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Free Market International has no effect on the direction of Astor Long/short i.e., Astor Long/short and Free Market go up and down completely randomly.
Pair Corralation between Astor Long/short and Free Market
Assuming the 90 days horizon Astor Longshort Fund is expected to generate 0.46 times more return on investment than Free Market. However, Astor Longshort Fund is 2.18 times less risky than Free Market. It trades about 0.46 of its potential returns per unit of risk. Free Market International is currently generating about -0.06 per unit of risk. If you would invest 1,378 in Astor Longshort Fund on September 1, 2024 and sell it today you would earn a total of 50.00 from holding Astor Longshort Fund or generate 3.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Astor Longshort Fund vs. Free Market International
Performance |
| Timeline |
| Astor Long/short |
| Free Market International |
Astor Long/short and Free Market Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Astor Long/short and Free Market
The main advantage of trading using opposite Astor Long/short and Free Market positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Astor Long/short position performs unexpectedly, Free Market 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 Free Market will offset losses from the drop in Free Market's long position.| Astor Long/short vs. Fidelity Real Estate | Astor Long/short vs. Prudential Real Estate | Astor Long/short vs. Deutsche Real Estate | Astor Long/short vs. Virtus Real Estate |
| Free Market vs. Touchstone Ultra Short | Free Market vs. Siit Ultra Short | Free Market vs. Astor Longshort Fund | Free Market vs. Franklin Federal Limited Term |
Check out your portfolio center.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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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