Correlation Between Wells Fargo and Astor Longshort
Can any of the company-specific risk be diversified away by investing in both Wells Fargo 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 Wells Fargo and Astor Longshort into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wells Fargo Mon and Astor Longshort Fund, you can compare the effects of market volatilities on Wells Fargo 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 Wells Fargo with a short position of Astor Longshort. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wells Fargo and Astor Longshort.
Diversification Opportunities for Wells Fargo and Astor Longshort
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Wells and Astor is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Wells Fargo Mon and Astor Longshort Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Astor Longshort and Wells Fargo 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 Wells Fargo Mon 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 Wells Fargo i.e., Wells Fargo and Astor Longshort go up and down completely randomly.
Pair Corralation between Wells Fargo and Astor Longshort
Assuming the 90 days horizon Wells Fargo Mon is expected to under-perform the Astor Longshort. In addition to that, Wells Fargo is 3.21 times more volatile than Astor Longshort Fund. It trades about -0.02 of its total potential returns per unit of risk. Astor Longshort Fund is currently generating about 0.13 per unit of volatility. If you would invest 1,413 in Astor Longshort Fund on September 13, 2024 and sell it today you would earn a total of 10.00 from holding Astor Longshort Fund or generate 0.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wells Fargo Mon vs. Astor Longshort Fund
Performance |
| Timeline |
| Wells Fargo Mon |
| Astor Longshort |
Wells Fargo and Astor Longshort Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wells Fargo and Astor Longshort
The main advantage of trading using opposite Wells Fargo and Astor Longshort positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wells Fargo 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.| Wells Fargo vs. Wells Fargo Advantage | Wells Fargo vs. Wells Fargo Advantage | Wells Fargo vs. Wells Fargo Advantage | Wells Fargo vs. Wells Fargo Ultra |
| 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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