Correlation Between Astor Longshort and Prudential Short
Can any of the company-specific risk be diversified away by investing in both Astor Longshort and Prudential Short 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 Prudential Short 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 Prudential Short Duration, you can compare the effects of market volatilities on Astor Longshort and Prudential Short 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 Prudential Short. Check out your portfolio center. Please also check ongoing floating volatility patterns of Astor Longshort and Prudential Short.
Diversification Opportunities for Astor Longshort and Prudential Short
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Astor and Prudential is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Astor Longshort Fund and Prudential Short Duration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prudential Short Duration 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 Prudential Short. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prudential Short Duration has no effect on the direction of Astor Longshort i.e., Astor Longshort and Prudential Short go up and down completely randomly.
Pair Corralation between Astor Longshort and Prudential Short
Assuming the 90 days horizon Astor Longshort Fund is expected to generate 1.42 times more return on investment than Prudential Short. However, Astor Longshort is 1.42 times more volatile than Prudential Short Duration. It trades about 0.13 of its potential returns per unit of risk. Prudential Short Duration is currently generating about 0.15 per unit of risk. If you would invest 1,146 in Astor Longshort Fund on September 14, 2024 and sell it today you would earn a total of 281.00 from holding Astor Longshort Fund or generate 24.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Astor Longshort Fund vs. Prudential Short Duration
Performance |
| Timeline |
| Astor Longshort |
| Prudential Short Duration |
Astor Longshort and Prudential Short Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Astor Longshort and Prudential Short
The main advantage of trading using opposite Astor Longshort and Prudential Short positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Astor Longshort position performs unexpectedly, Prudential Short 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 Prudential Short will offset losses from the drop in Prudential Short's long position.| Astor Longshort vs. Astor Star Fund | Astor Longshort vs. Astor Star Fund | Astor Longshort vs. Astor Longshort Fund | Astor Longshort vs. Astor Longshort Fund |
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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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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