Correlation Between Astor Long/short and Midcap Growth
Can any of the company-specific risk be diversified away by investing in both Astor Long/short and Midcap Growth 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 Midcap Growth 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 Midcap Growth Fund, you can compare the effects of market volatilities on Astor Long/short and Midcap Growth 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 Midcap Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Astor Long/short and Midcap Growth.
Diversification Opportunities for Astor Long/short and Midcap Growth
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Astor and Midcap is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Astor Longshort Fund and Midcap Growth Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Midcap Growth 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 Midcap Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Midcap Growth has no effect on the direction of Astor Long/short i.e., Astor Long/short and Midcap Growth go up and down completely randomly.
Pair Corralation between Astor Long/short and Midcap Growth
Assuming the 90 days horizon Astor Long/short is expected to generate 3.23 times less return on investment than Midcap Growth. But when comparing it to its historical volatility, Astor Longshort Fund is 3.17 times less risky than Midcap Growth. It trades about 0.46 of its potential returns per unit of risk. Midcap Growth Fund is currently generating about 0.47 of returns per unit of risk over similar time horizon. If you would invest 1,087 in Midcap Growth Fund on September 5, 2024 and sell it today you would earn a total of 105.00 from holding Midcap Growth Fund or generate 9.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 80.95% |
| Values | Daily Returns |
Astor Longshort Fund vs. Midcap Growth Fund
Performance |
| Timeline |
| Astor Long/short |
| Midcap Growth |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Solid
Astor Long/short and Midcap Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Astor Long/short and Midcap Growth
The main advantage of trading using opposite Astor Long/short and Midcap Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Astor Long/short position performs unexpectedly, Midcap Growth 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 Midcap Growth will offset losses from the drop in Midcap Growth's long position.| Astor Long/short vs. Ab Government Exchange | Astor Long/short vs. Edward Jones Money | Astor Long/short vs. Hsbc Treasury Money | Astor Long/short vs. American Century Municipal |
| Midcap Growth vs. Ab Select Longshort | Midcap Growth vs. Barings Active Short | Midcap Growth vs. Goldman Sachs Short | Midcap Growth vs. Astor Longshort Fund |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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