Correlation Between Astor Long/short and Payden Corporate
Can any of the company-specific risk be diversified away by investing in both Astor Long/short and Payden Corporate 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 Payden Corporate 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 Payden Corporate Bond, you can compare the effects of market volatilities on Astor Long/short and Payden Corporate 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 Payden Corporate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Astor Long/short and Payden Corporate.
Diversification Opportunities for Astor Long/short and Payden Corporate
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Astor and Payden is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Astor Longshort Fund and Payden Corporate Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Payden Corporate Bond 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 Payden Corporate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Payden Corporate Bond has no effect on the direction of Astor Long/short i.e., Astor Long/short and Payden Corporate go up and down completely randomly.
Pair Corralation between Astor Long/short and Payden Corporate
Assuming the 90 days horizon Astor Longshort Fund is expected to generate 1.24 times more return on investment than Payden Corporate. However, Astor Long/short is 1.24 times more volatile than Payden Corporate Bond. It trades about 0.15 of its potential returns per unit of risk. Payden Corporate Bond is currently generating about 0.11 per unit of risk. If you would invest 1,222 in Astor Longshort Fund on September 1, 2024 and sell it today you would earn a total of 99.00 from holding Astor Longshort Fund or generate 8.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Astor Longshort Fund vs. Payden Corporate Bond
Performance |
| Timeline |
| Astor Long/short |
| Payden Corporate Bond |
Astor Long/short and Payden Corporate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Astor Long/short and Payden Corporate
The main advantage of trading using opposite Astor Long/short and Payden Corporate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Astor Long/short position performs unexpectedly, Payden Corporate 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 Payden Corporate will offset losses from the drop in Payden Corporate's long position.The idea behind Astor Longshort Fund and Payden Corporate Bond pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
| Payden Corporate vs. Vanguard Total Stock | Payden Corporate vs. Vanguard 500 Index | Payden Corporate vs. Vanguard Total Stock | Payden Corporate vs. Vanguard Total Stock |
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.
Other Complementary Tools
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device |