Correlation Between Ultra-short Term and Astor Long/short
Can any of the company-specific risk be diversified away by investing in both Ultra-short Term 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 Ultra-short Term 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 Ultra Short Term Fixed and Astor Longshort Fund, you can compare the effects of market volatilities on Ultra-short Term 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 Ultra-short Term with a short position of Astor Long/short. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ultra-short Term and Astor Long/short.
Diversification Opportunities for Ultra-short Term and Astor Long/short
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Ultra-short and Astor is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Ultra Short Term Fixed 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 Ultra-short Term 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 Ultra Short Term Fixed 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 Ultra-short Term i.e., Ultra-short Term and Astor Long/short go up and down completely randomly.
Pair Corralation between Ultra-short Term and Astor Long/short
Assuming the 90 days horizon Ultra-short Term is expected to generate 2.14 times less return on investment than Astor Long/short. But when comparing it to its historical volatility, Ultra Short Term Fixed is 7.03 times less risky than Astor Long/short. It trades about 0.48 of its potential returns per unit of risk. Astor Longshort Fund is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 1,167 in Astor Longshort Fund on August 30, 2024 and sell it today you would earn a total of 260.00 from holding Astor Longshort Fund or generate 22.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ultra Short Term Fixed vs. Astor Longshort Fund
Performance |
| Timeline |
| Ultra Short Term |
| Astor Long/short |
Ultra-short Term and Astor Long/short Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ultra-short Term and Astor Long/short
The main advantage of trading using opposite Ultra-short Term and Astor Long/short positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ultra-short Term 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.| Ultra-short Term vs. Nebraska Municipal Fund | Ultra-short Term vs. Nuveen Massachusetts Municipal | Ultra-short Term vs. T Rowe Price | Ultra-short Term vs. Nuveen Minnesota Municipal |
| Astor Long/short vs. Ambrus Core Bond | Astor Long/short vs. Ms Global Fixed | Astor Long/short vs. T Rowe Price | Astor Long/short vs. Multisector Bond Sma |
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 Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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