Correlation Between Astonriver Road and Growth Opportunities

Can any of the company-specific risk be diversified away by investing in both Astonriver Road and Growth Opportunities 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 Astonriver Road and Growth Opportunities into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Astonriver Road Independent and Growth Opportunities Fund, you can compare the effects of market volatilities on Astonriver Road and Growth Opportunities 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 Astonriver Road with a short position of Growth Opportunities. Check out your portfolio center. Please also check ongoing floating volatility patterns of Astonriver Road and Growth Opportunities.

Diversification Opportunities for Astonriver Road and Growth Opportunities

-0.43

Correlation Coefficient

Astonriver Road  Growth Opportunities

Very good diversification

The 3 months correlation between Astonriver and Growth is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Astonriver Road Independent and Growth Opportunities Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Growth Opportunities and Astonriver Road 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 Astonriver Road Independent are associated (or correlated) with Growth Opportunities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Growth Opportunities has no effect on the direction of Astonriver Road i.e., Astonriver Road and Growth Opportunities go up and down completely randomly.

Pair Corralation between Astonriver Road and Growth Opportunities

Assuming the 90 days horizon Astonriver Road Independent is expected to under-perform the Growth Opportunities. But the mutual fund apears to be less risky and, when comparing its historical volatility, Astonriver Road Independent is 1.27 times less risky than Growth Opportunities. The mutual fund trades about -0.31 of its potential returns per unit of risk. The Growth Opportunities Fund is currently generating about -0.2 of returns per unit of risk over similar time horizon. If you would invest  6,014  in Growth Opportunities Fund on October 6, 2024 and sell it today you would lose (332.00) from holding Growth Opportunities Fund or give up 5.52% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	95.24%
Values	Daily Returns

Astonriver Road Independent  vs.  Growth Opportunities Fund

Astonriver Road Inde

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Astonriver Road Independent has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's forward indicators remain fairly strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Growth Opportunities

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Growth Opportunities Fund are ranked lower than 5 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Growth Opportunities is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Astonriver Road and Growth Opportunities

The main advantage of trading using opposite Astonriver Road and Growth Opportunities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Astonriver Road position performs unexpectedly, Growth Opportunities 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 Growth Opportunities will offset losses from the drop in Growth Opportunities' long position.

The idea behind Astonriver Road Independent and Growth Opportunities Fund pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Equity Valuation module to check real value of public entities based on technical and fundamental data.