Correlation Between T Rowe and Astor Long/short
Can any of the company-specific risk be diversified away by investing in both T Rowe and Astor Long/short 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 T Rowe and Astor Long/short into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between T Rowe Price and Astor Longshort Fund, you can compare the effects of market volatilities on T Rowe and Astor Long/short 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 T Rowe with a short position of Astor Long/short. Check out your portfolio center. Please also check ongoing floating volatility patterns of T Rowe and Astor Long/short.
Diversification Opportunities for T Rowe and Astor Long/short
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between PACEX and Astor is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding T Rowe Price and Astor Longshort Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Astor Long/short and T Rowe 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 T Rowe Price are associated (or correlated) with Astor Long/short. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Astor Long/short has no effect on the direction of T Rowe i.e., T Rowe and Astor Long/short go up and down completely randomly.
Pair Corralation between T Rowe and Astor Long/short
Assuming the 90 days horizon T Rowe Price is expected to under-perform the Astor Long/short. But the mutual fund apears to be less risky and, when comparing its historical volatility, T Rowe Price is 2.48 times less risky than Astor Long/short. The mutual fund trades about -0.07 of its potential returns per unit of risk. The Astor Longshort Fund is currently generating about 0.46 of returns per unit of risk over similar time horizon. If you would invest 1,378 in Astor Longshort Fund on September 1, 2024 and sell it today you would earn a total of 50.00 from holding Astor Longshort Fund or generate 3.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
T Rowe Price vs. Astor Longshort Fund
Performance |
| Timeline |
| T Rowe Price |
| Astor Long/short |
T Rowe and Astor Long/short Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with T Rowe and Astor Long/short
The main advantage of trading using opposite T Rowe and Astor Long/short positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if T Rowe position performs unexpectedly, Astor Long/short 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 Long/short will offset losses from the drop in Astor Long/short's long position.| T Rowe vs. Alliancebernstein Global High | T Rowe vs. Needham Aggressive Growth | T Rowe vs. Morningstar Aggressive Growth | T Rowe vs. California High Yield Municipal |
| Astor Long/short vs. Fidelity Real Estate | Astor Long/short vs. Prudential Real Estate | Astor Long/short vs. Deutsche Real Estate | Astor Long/short vs. Virtus Real Estate |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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