Correlation Between Nasdaq-100 Fund and Astor Star
Can any of the company-specific risk be diversified away by investing in both Nasdaq-100 Fund 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 Nasdaq-100 Fund and Astor Star into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nasdaq 100 Fund Class and Astor Star Fund, you can compare the effects of market volatilities on Nasdaq-100 Fund 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 Nasdaq-100 Fund with a short position of Astor Star. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nasdaq-100 Fund and Astor Star.
Diversification Opportunities for Nasdaq-100 Fund and Astor Star
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Nasdaq-100 and Astor is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Nasdaq 100 Fund Class 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 Nasdaq-100 Fund 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 Nasdaq 100 Fund Class 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 Nasdaq-100 Fund i.e., Nasdaq-100 Fund and Astor Star go up and down completely randomly.
Pair Corralation between Nasdaq-100 Fund and Astor Star
Assuming the 90 days horizon Nasdaq-100 Fund is expected to generate 2.15 times less return on investment than Astor Star. In addition to that, Nasdaq-100 Fund is 1.69 times more volatile than Astor Star Fund. It trades about 0.09 of its total potential returns per unit of risk. Astor Star Fund is currently generating about 0.33 per unit of volatility. If you would invest 1,568 in Astor Star Fund on August 28, 2024 and sell it today you would earn a total of 74.00 from holding Astor Star Fund or generate 4.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nasdaq 100 Fund Class vs. Astor Star Fund
Performance |
| Timeline |
| Nasdaq 100 Fund |
| Astor Star Fund |
Nasdaq-100 Fund and Astor Star Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nasdaq-100 Fund and Astor Star
The main advantage of trading using opposite Nasdaq-100 Fund and Astor Star positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nasdaq-100 Fund 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.| Nasdaq-100 Fund vs. Nasdaq 100 Fund Class | Nasdaq-100 Fund vs. Nasdaq 100 Fund Class | Nasdaq-100 Fund vs. Nasdaq 100 2x Strategy | Nasdaq-100 Fund vs. Dow 2x Strategy |
| Astor Star vs. Astor Longshort Fund | Astor Star vs. Astor Longshort Fund | Astor Star vs. Fidelity Balanced Fund | Astor Star vs. Thrivent Moderate Allocation |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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