Correlation Between Astor Long/short and Astor Star
Can any of the company-specific risk be diversified away by investing in both Astor Long/short 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 Long/short 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 Long/short 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 Long/short with a short position of Astor Star. Check out your portfolio center. Please also check ongoing floating volatility patterns of Astor Long/short and Astor Star.
Diversification Opportunities for Astor Long/short and Astor Star
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Astor and Astor is 0.96. 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 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 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 Long/short i.e., Astor Long/short and Astor Star go up and down completely randomly.
Pair Corralation between Astor Long/short and Astor Star
Assuming the 90 days horizon Astor Long/short is expected to generate 2.09 times less return on investment than Astor Star. But when comparing it to its historical volatility, Astor Longshort Fund is 1.61 times less risky than Astor Star. It trades about 0.27 of its potential returns per unit of risk. Astor Star Fund is currently generating about 0.36 of returns per unit of risk over similar time horizon. If you would invest 1,387 in Astor Star Fund on August 30, 2024 and sell it today you would earn a total of 73.00 from holding Astor Star Fund or generate 5.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
Astor Longshort Fund vs. Astor Star Fund
Performance |
| Timeline |
| Astor Long/short |
| Astor Star Fund |
Astor Long/short and Astor Star Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Astor Long/short and Astor Star
The main advantage of trading using opposite Astor Long/short and Astor Star positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Astor Long/short 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 Long/short vs. Pgim Jennison Diversified | Astor Long/short vs. Huber Capital Diversified | Astor Long/short vs. Vanguard Strategic Small Cap | Astor Long/short vs. T Rowe Price |
| Astor Star vs. Davis Financial Fund | Astor Star vs. Financials Ultrasector Profund | Astor Star vs. Blackrock Financial Institutions | Astor Star vs. T Rowe Price |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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