Correlation Between Astor Longshort and Astor Star
Can any of the company-specific risk be diversified away by investing in both Astor Longshort and Astor Star 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 Astor Star 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 Astor Star Fund, you can compare the effects of market volatilities on Astor Longshort and Astor Star 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 Astor Star. Check out your portfolio center. Please also check ongoing floating volatility patterns of Astor Longshort and Astor Star.
Diversification Opportunities for Astor Longshort and Astor Star
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Astor and Astor is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Astor Longshort Fund and Astor Star Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Astor Star Fund 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 Astor Star. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Astor Star Fund has no effect on the direction of Astor Longshort i.e., Astor Longshort and Astor Star go up and down completely randomly.
Pair Corralation between Astor Longshort and Astor Star
Assuming the 90 days horizon Astor Longshort is expected to generate 1.8 times less return on investment than Astor Star. But when comparing it to its historical volatility, Astor Longshort Fund is 1.58 times less risky than Astor Star. It trades about 0.29 of its potential returns per unit of risk. Astor Star Fund is currently generating about 0.33 of returns per unit of risk over similar time horizon. If you would invest 1,568 in Astor Star Fund on August 28, 2024 and sell it today you would earn a total of 74.00 from holding Astor Star Fund or generate 4.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Astor Longshort Fund vs. Astor Star Fund
Performance |
| Timeline |
| Astor Longshort |
| Astor Star Fund |
Astor Longshort and Astor Star Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Astor Longshort and Astor Star
The main advantage of trading using opposite Astor Longshort and Astor Star positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Astor Longshort position performs unexpectedly, Astor Star 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 Astor Star will offset losses from the drop in Astor Star's long position.| Astor Longshort vs. Astor Longshort Fund | Astor Longshort vs. Astor Longshort Fund | Astor Longshort vs. Fidelity Balanced Fund | Astor Longshort vs. Thrivent Moderate Allocation |
| Astor Star vs. Astor Longshort Fund | Astor Star vs. Astor Longshort Fund | Astor Star vs. Fidelity Balanced Fund | Astor Star vs. Thrivent Moderate Allocation |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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