Correlation Between Astor Long/short and Semiconductor Ultrasector
Can any of the company-specific risk be diversified away by investing in both Astor Long/short and Semiconductor Ultrasector 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 Semiconductor Ultrasector 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 Semiconductor Ultrasector Profund, you can compare the effects of market volatilities on Astor Long/short and Semiconductor Ultrasector 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 Semiconductor Ultrasector. Check out your portfolio center. Please also check ongoing floating volatility patterns of Astor Long/short and Semiconductor Ultrasector.
Diversification Opportunities for Astor Long/short and Semiconductor Ultrasector
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Astor and Semiconductor is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Astor Longshort Fund and Semiconductor Ultrasector Prof in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Semiconductor Ultrasector 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 Semiconductor Ultrasector. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Semiconductor Ultrasector has no effect on the direction of Astor Long/short i.e., Astor Long/short and Semiconductor Ultrasector go up and down completely randomly.
Pair Corralation between Astor Long/short and Semiconductor Ultrasector
Assuming the 90 days horizon Astor Longshort Fund is expected to generate 0.14 times more return on investment than Semiconductor Ultrasector. However, Astor Longshort Fund is 7.06 times less risky than Semiconductor Ultrasector. It trades about 0.19 of its potential returns per unit of risk. Semiconductor Ultrasector Profund is currently generating about 0.01 per unit of risk. If you would invest 1,386 in Astor Longshort Fund on August 24, 2024 and sell it today you would earn a total of 24.00 from holding Astor Longshort Fund or generate 1.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Astor Longshort Fund vs. Semiconductor Ultrasector Prof
Performance |
| Timeline |
| Astor Long/short |
| Semiconductor Ultrasector |
Astor Long/short and Semiconductor Ultrasector Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Astor Long/short and Semiconductor Ultrasector
The main advantage of trading using opposite Astor Long/short and Semiconductor Ultrasector positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Astor Long/short position performs unexpectedly, Semiconductor Ultrasector 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 Semiconductor Ultrasector will offset losses from the drop in Semiconductor Ultrasector's long position.| Astor Long/short vs. Fidelity Managed Retirement | Astor Long/short vs. Pro Blend Moderate Term | Astor Long/short vs. Moderately Aggressive Balanced | Astor Long/short vs. Franklin Lifesmart Retirement |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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