Correlation Between Astor Longshort and Clearbridge Large

Can any of the company-specific risk be diversified away by investing in both Astor Longshort and Clearbridge Large 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 Longshort and Clearbridge Large 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 Clearbridge Large Cap, you can compare the effects of market volatilities on Astor Longshort and Clearbridge Large 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 Longshort with a short position of Clearbridge Large. Check out your portfolio center. Please also check ongoing floating volatility patterns of Astor Longshort and Clearbridge Large.

Diversification Opportunities for Astor Longshort and Clearbridge Large

0.97

Correlation Coefficient

Astor Longshort  Clearbridge Large

Almost no diversification

The 3 months correlation between Astor and Clearbridge is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Astor Longshort Fund and Clearbridge Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clearbridge Large Cap and Astor Longshort 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 Clearbridge Large. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clearbridge Large Cap has no effect on the direction of Astor Longshort i.e., Astor Longshort and Clearbridge Large go up and down completely randomly.

Pair Corralation between Astor Longshort and Clearbridge Large

Assuming the 90 days horizon Astor Longshort is expected to generate 1.32 times less return on investment than Clearbridge Large. But when comparing it to its historical volatility, Astor Longshort Fund is 2.1 times less risky than Clearbridge Large. It trades about 0.23 of its potential returns per unit of risk. Clearbridge Large Cap is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  4,279  in Clearbridge Large Cap on September 12, 2024 and sell it today you would earn a total of  268.00  from holding Clearbridge Large Cap or generate 6.26% return on investment over 90 days.

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

Astor Longshort Fund  vs.  Clearbridge Large Cap

Astor Longshort

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Astor Longshort Fund are ranked lower than 17 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Astor Longshort is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Clearbridge Large Cap

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Clearbridge Large Cap are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical and fundamental indicators, Clearbridge Large is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Astor Longshort and Clearbridge Large

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

The idea behind Astor Longshort Fund and Clearbridge Large Cap 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 Stocks Directory module to find actively traded stocks across global markets.