Correlation Between Astor Star and Astor Long/short
Can any of the company-specific risk be diversified away by investing in both Astor Star 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 Astor Star 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 Astor Star Fund and Astor Longshort Fund, you can compare the effects of market volatilities on Astor Star 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 Astor Star with a short position of Astor Long/short. Check out your portfolio center. Please also check ongoing floating volatility patterns of Astor Star and Astor Long/short.
Diversification Opportunities for Astor Star and Astor Long/short
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Astor and Astor is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Astor Star 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 Astor Star 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 Astor Star 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 Astor Star i.e., Astor Star and Astor Long/short go up and down completely randomly.
Pair Corralation between Astor Star and Astor Long/short
Assuming the 90 days horizon Astor Star is expected to generate 1.07 times less return on investment than Astor Long/short. In addition to that, Astor Star is 1.69 times more volatile than Astor Longshort Fund. It trades about 0.09 of its total potential returns per unit of risk. Astor Longshort Fund is currently generating about 0.15 per unit of volatility. If you would invest 1,229 in Astor Longshort Fund on September 4, 2024 and sell it today you would earn a total of 192.00 from holding Astor Longshort Fund or generate 15.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Astor Star Fund vs. Astor Longshort Fund
Performance |
| Timeline |
| Astor Star Fund |
| Astor Long/short |
Astor Star and Astor Long/short Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Astor Star and Astor Long/short
The main advantage of trading using opposite Astor Star and Astor Long/short positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Astor Star 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.| Astor Star vs. Astor Star Fund | Astor Star vs. Astor Star Fund | Astor Star vs. Astor Longshort Fund | Astor Star vs. Nasdaq 100 Fund Class |
| Astor Long/short vs. Astor Star Fund | Astor Long/short vs. Astor Star Fund | Astor Long/short vs. Astor Longshort Fund | Astor Long/short 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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