Correlation Between Prudential Short and Astor Longshort
Can any of the company-specific risk be diversified away by investing in both Prudential Short and Astor Longshort 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 Prudential Short and Astor Longshort into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Prudential Short Duration and Astor Longshort Fund, you can compare the effects of market volatilities on Prudential Short and Astor Longshort 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 Prudential Short with a short position of Astor Longshort. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prudential Short and Astor Longshort.
Diversification Opportunities for Prudential Short and Astor Longshort
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Prudential and Astor is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Prudential Short Duration and Astor Longshort Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Astor Longshort and Prudential 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 Prudential Short Duration are associated (or correlated) with Astor Longshort. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Astor Longshort has no effect on the direction of Prudential Short i.e., Prudential Short and Astor Longshort go up and down completely randomly.
Pair Corralation between Prudential Short and Astor Longshort
Assuming the 90 days horizon Prudential Short is expected to generate 1.28 times less return on investment than Astor Longshort. But when comparing it to its historical volatility, Prudential Short Duration is 1.42 times less risky than Astor Longshort. It trades about 0.15 of its potential returns per unit of risk. Astor Longshort Fund is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 1,146 in Astor Longshort Fund on September 14, 2024 and sell it today you would earn a total of 281.00 from holding Astor Longshort Fund or generate 24.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Prudential Short Duration vs. Astor Longshort Fund
Performance |
| Timeline |
| Prudential Short Duration |
| Astor Longshort |
Prudential Short and Astor Longshort Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Prudential Short and Astor Longshort
The main advantage of trading using opposite Prudential Short and Astor Longshort positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Prudential Short position performs unexpectedly, Astor Longshort 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 Longshort will offset losses from the drop in Astor Longshort's long position.| Prudential Short vs. T Rowe Price | Prudential Short vs. Ab Small Cap | Prudential Short vs. Versatile Bond Portfolio | Prudential Short vs. L Abbett Fundamental |
| Astor Longshort vs. Astor Star Fund | Astor Longshort vs. Astor Star Fund | Astor Longshort vs. Astor Longshort Fund | Astor Longshort vs. Astor Longshort Fund |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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