Correlation Between Astor Longshort and Franklin New
Can any of the company-specific risk be diversified away by investing in both Astor Longshort and Franklin New 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 Longshort and Franklin New 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 Franklin New Jersey, you can compare the effects of market volatilities on Astor Longshort and Franklin New 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 Longshort with a short position of Franklin New. Check out your portfolio center. Please also check ongoing floating volatility patterns of Astor Longshort and Franklin New.
Diversification Opportunities for Astor Longshort and Franklin New
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Astor and Franklin is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Astor Longshort Fund and Franklin New Jersey in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin New Jersey and Astor Longshort 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 Franklin New. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin New Jersey has no effect on the direction of Astor Longshort i.e., Astor Longshort and Franklin New go up and down completely randomly.
Pair Corralation between Astor Longshort and Franklin New
Assuming the 90 days horizon Astor Longshort is expected to generate 1.6 times less return on investment than Franklin New. In addition to that, Astor Longshort is 2.09 times more volatile than Franklin New Jersey. It trades about 0.14 of its total potential returns per unit of risk. Franklin New Jersey is currently generating about 0.47 per unit of volatility. If you would invest 1,036 in Franklin New Jersey on September 12, 2024 and sell it today you would earn a total of 13.00 from holding Franklin New Jersey or generate 1.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Astor Longshort Fund vs. Franklin New Jersey
Performance |
| Timeline |
| Astor Longshort |
| Franklin New Jersey |
Astor Longshort and Franklin New Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Astor Longshort and Franklin New
The main advantage of trading using opposite Astor Longshort and Franklin New positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Astor Longshort position performs unexpectedly, Franklin New 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 Franklin New will offset losses from the drop in Franklin New's long position.| Astor Longshort vs. SCOR PK | Astor Longshort vs. Morningstar Unconstrained Allocation | Astor Longshort vs. Via Renewables | Astor Longshort vs. Bondbloxx ETF Trust |
| Franklin New vs. Investec Emerging Markets | Franklin New vs. Rbc Emerging Markets | Franklin New vs. Dws Emerging Markets | Franklin New vs. Mid Cap 15x Strategy |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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