Correlation Between Astor Long/short and Oppenheimer Intl

Can any of the company-specific risk be diversified away by investing in both Astor Long/short and Oppenheimer Intl 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 Long/short and Oppenheimer Intl into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Astor Longshort Fund and Oppenheimer Intl Small, you can compare the effects of market volatilities on Astor Long/short and Oppenheimer Intl 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 Long/short with a short position of Oppenheimer Intl. Check out your portfolio center. Please also check ongoing floating volatility patterns of Astor Long/short and Oppenheimer Intl.

Diversification Opportunities for Astor Long/short and Oppenheimer Intl

0.62

Correlation Coefficient

Astor Long/short  Oppenheimer Intl

Poor diversification

The 3 months correlation between Astor and Oppenheimer is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Astor Longshort Fund and Oppenheimer Intl Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oppenheimer Intl Small and Astor Long/short 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 Longshort Fund are associated (or correlated) with Oppenheimer Intl. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oppenheimer Intl Small has no effect on the direction of Astor Long/short i.e., Astor Long/short and Oppenheimer Intl go up and down completely randomly.

Pair Corralation between Astor Long/short and Oppenheimer Intl

Assuming the 90 days horizon Astor Longshort Fund is expected to generate 0.71 times more return on investment than Oppenheimer Intl. However, Astor Longshort Fund is 1.41 times less risky than Oppenheimer Intl. It trades about -0.13 of its potential returns per unit of risk. Oppenheimer Intl Small is currently generating about -0.1 per unit of risk. If you would invest  1,396  in Astor Longshort Fund on December 1, 2024 and sell it today you would lose (105.00) from holding Astor Longshort Fund or give up 7.52% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Astor Longshort Fund  vs.  Oppenheimer Intl Small

Astor Long/short

Risk-Adjusted Performance

Very Weak

Over the last 90 days Astor Longshort Fund has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's forward indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Oppenheimer Intl Small

Risk-Adjusted Performance

Very Weak

Over the last 90 days Oppenheimer Intl Small has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with Astor Long/short and Oppenheimer Intl

The main advantage of trading using opposite Astor Long/short and Oppenheimer Intl positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Astor Long/short position performs unexpectedly, Oppenheimer Intl 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 Oppenheimer Intl will offset losses from the drop in Oppenheimer Intl's long position.

The idea behind Astor Longshort Fund and Oppenheimer Intl Small 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.