Correlation Between Smead Value and Astor Long/short
Can any of the company-specific risk be diversified away by investing in both Smead Value 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 Smead Value 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 Smead Value Fund and Astor Longshort Fund, you can compare the effects of market volatilities on Smead Value 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 Smead Value with a short position of Astor Long/short. Check out your portfolio center. Please also check ongoing floating volatility patterns of Smead Value and Astor Long/short.
Diversification Opportunities for Smead Value and Astor Long/short
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Smead and Astor is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Smead Value Fund 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 Smead Value 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 Smead Value Fund 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 Smead Value i.e., Smead Value and Astor Long/short go up and down completely randomly.
Pair Corralation between Smead Value and Astor Long/short
Assuming the 90 days horizon Smead Value Fund is expected to generate 1.96 times more return on investment than Astor Long/short. However, Smead Value is 1.96 times more volatile than Astor Longshort Fund. It trades about 0.15 of its potential returns per unit of risk. Astor Longshort Fund is currently generating about 0.24 per unit of risk. If you would invest 8,371 in Smead Value Fund on August 27, 2024 and sell it today you would earn a total of 215.00 from holding Smead Value Fund or generate 2.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Smead Value Fund vs. Astor Longshort Fund
Performance |
| Timeline |
| Smead Value Fund |
| Astor Long/short |
Smead Value and Astor Long/short Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Smead Value and Astor Long/short
The main advantage of trading using opposite Smead Value and Astor Long/short positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Smead Value 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.| Smead Value vs. Oppenheimer International Growth | Smead Value vs. Aquagold International | Smead Value vs. Morningstar Unconstrained Allocation | Smead Value vs. Thrivent High Yield |
| Astor Long/short vs. Rbc Short Duration | Astor Long/short vs. Angel Oak Ultrashort | Astor Long/short vs. Quantitative Longshort Equity | Astor Long/short vs. Old Westbury Short Term |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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