Correlation Between Versatile Bond and Astor Long/short
Can any of the company-specific risk be diversified away by investing in both Versatile Bond 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 Versatile Bond 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 Versatile Bond Portfolio and Astor Longshort Fund, you can compare the effects of market volatilities on Versatile Bond 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 Versatile Bond with a short position of Astor Long/short. Check out your portfolio center. Please also check ongoing floating volatility patterns of Versatile Bond and Astor Long/short.
Diversification Opportunities for Versatile Bond and Astor Long/short
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Versatile and Astor is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Versatile Bond Portfolio 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 Versatile Bond 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 Versatile Bond Portfolio 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 Versatile Bond i.e., Versatile Bond and Astor Long/short go up and down completely randomly.
Pair Corralation between Versatile Bond and Astor Long/short
Assuming the 90 days horizon Versatile Bond is expected to generate 11.29 times less return on investment than Astor Long/short. But when comparing it to its historical volatility, Versatile Bond Portfolio is 2.85 times less risky than Astor Long/short. It trades about 0.12 of its potential returns per unit of risk. 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 | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Versatile Bond Portfolio vs. Astor Longshort Fund
Performance |
| Timeline |
| Versatile Bond Portfolio |
| Astor Long/short |
Versatile Bond and Astor Long/short Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Versatile Bond and Astor Long/short
The main advantage of trading using opposite Versatile Bond and Astor Long/short positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Versatile Bond 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.| Versatile Bond vs. Short Term Treasury Portfolio | Versatile Bond vs. Aggressive Growth Portfolio | Versatile Bond vs. Permanent Portfolio Class | Versatile Bond vs. Thompson Bond Fund |
| 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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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