Correlation Between Astor Longshort and Wells Fargo
Can any of the company-specific risk be diversified away by investing in both Astor Longshort and Wells Fargo 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 Wells Fargo 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 Wells Fargo Large, you can compare the effects of market volatilities on Astor Longshort and Wells Fargo 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 Wells Fargo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Astor Longshort and Wells Fargo.
Diversification Opportunities for Astor Longshort and Wells Fargo
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Astor and Wells is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Astor Longshort Fund and Wells Fargo Large in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wells Fargo Large 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 Wells Fargo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wells Fargo Large has no effect on the direction of Astor Longshort i.e., Astor Longshort and Wells Fargo go up and down completely randomly.
Pair Corralation between Astor Longshort and Wells Fargo
Assuming the 90 days horizon Astor Longshort is expected to generate 2.19 times less return on investment than Wells Fargo. But when comparing it to its historical volatility, Astor Longshort Fund is 2.76 times less risky than Wells Fargo. It trades about 0.23 of its potential returns per unit of risk. Wells Fargo Large is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 4,310 in Wells Fargo Large on September 12, 2024 and sell it today you would earn a total of 462.00 from holding Wells Fargo Large or generate 10.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 98.44% |
| Values | Daily Returns |
Astor Longshort Fund vs. Wells Fargo Large
Performance |
| Timeline |
| Astor Longshort |
| Wells Fargo Large |
Astor Longshort and Wells Fargo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Astor Longshort and Wells Fargo
The main advantage of trading using opposite Astor Longshort and Wells Fargo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Astor Longshort position performs unexpectedly, Wells Fargo 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 Wells Fargo will offset losses from the drop in Wells Fargo'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 |
| Wells Fargo vs. Ab Small Cap | Wells Fargo vs. Sp Smallcap 600 | Wells Fargo vs. Cardinal Small Cap | Wells Fargo vs. Scout Small 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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