Correlation Between Astor Long/short and Nebraska Municipal
Can any of the company-specific risk be diversified away by investing in both Astor Long/short and Nebraska Municipal 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 Nebraska Municipal 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 Nebraska Municipal Fund, you can compare the effects of market volatilities on Astor Long/short and Nebraska Municipal 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 Nebraska Municipal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Astor Long/short and Nebraska Municipal.
Diversification Opportunities for Astor Long/short and Nebraska Municipal
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Astor and Nebraska is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Astor Longshort Fund and Nebraska Municipal Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nebraska Municipal 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 Nebraska Municipal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nebraska Municipal has no effect on the direction of Astor Long/short i.e., Astor Long/short and Nebraska Municipal go up and down completely randomly.
Pair Corralation between Astor Long/short and Nebraska Municipal
Assuming the 90 days horizon Astor Longshort Fund is expected to under-perform the Nebraska Municipal. In addition to that, Astor Long/short is 2.01 times more volatile than Nebraska Municipal Fund. It trades about -0.05 of its total potential returns per unit of risk. Nebraska Municipal Fund is currently generating about 0.1 per unit of volatility. If you would invest 912.00 in Nebraska Municipal Fund on December 11, 2024 and sell it today you would earn a total of 9.00 from holding Nebraska Municipal Fund or generate 0.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Astor Longshort Fund vs. Nebraska Municipal Fund
Performance |
| Timeline |
| Astor Long/short |
| Nebraska Municipal |
Astor Long/short and Nebraska Municipal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Astor Long/short and Nebraska Municipal
The main advantage of trading using opposite Astor Long/short and Nebraska Municipal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Astor Long/short position performs unexpectedly, Nebraska Municipal 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 Nebraska Municipal will offset losses from the drop in Nebraska Municipal's long position.| Astor Long/short vs. Diversified Bond Fund | Astor Long/short vs. Jhancock Diversified Macro | Astor Long/short vs. Diversified Bond Fund | Astor Long/short vs. Principal Lifetime Hybrid |
| Nebraska Municipal vs. Ab Large Cap | Nebraska Municipal vs. Transamerica Large Cap | Nebraska Municipal vs. Lord Abbett Affiliated | Nebraska Municipal vs. Tax Managed Large Cap |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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