Correlation Between Astor Longshort and Simt Global

Can any of the company-specific risk be diversified away by investing in both Astor Longshort and Simt Global 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 Simt Global 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 Simt Global Managed, you can compare the effects of market volatilities on Astor Longshort and Simt Global 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 Simt Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Astor Longshort and Simt Global.

Diversification Opportunities for Astor Longshort and Simt Global

0.07

Correlation Coefficient

Astor Longshort  Simt Global

Significant diversification

The 3 months correlation between Astor and Simt is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Astor Longshort Fund and Simt Global Managed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Simt Global Managed 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 Simt Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Simt Global Managed has no effect on the direction of Astor Longshort i.e., Astor Longshort and Simt Global go up and down completely randomly.

Pair Corralation between Astor Longshort and Simt Global

Assuming the 90 days horizon Astor Longshort Fund is expected to under-perform the Simt Global. But the mutual fund apears to be less risky and, when comparing its historical volatility, Astor Longshort Fund is 1.04 times less risky than Simt Global. The mutual fund trades about -0.02 of its potential returns per unit of risk. The Simt Global Managed is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest  1,009  in Simt Global Managed on December 28, 2024 and sell it today you would earn a total of  59.00  from holding Simt Global Managed or generate 5.85% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.36%
Values	Daily Returns

Astor Longshort Fund  vs.  Simt Global Managed

Astor Longshort

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 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.

Simt Global Managed

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Simt Global Managed are ranked lower than 14 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Simt Global is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Astor Longshort and Simt Global

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

The idea behind Astor Longshort Fund and Simt Global Managed 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 Transaction History module to view history of all your transactions and understand their impact on performance.