Correlation Between Astor Long/short and Df Dent
Can any of the company-specific risk be diversified away by investing in both Astor Long/short and Df Dent 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 Df Dent 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 Df Dent Small, you can compare the effects of market volatilities on Astor Long/short and Df Dent 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 Df Dent. Check out your portfolio center. Please also check ongoing floating volatility patterns of Astor Long/short and Df Dent.
Diversification Opportunities for Astor Long/short and Df Dent
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Astor and DFDSX is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Astor Longshort Fund and Df Dent Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Df Dent 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 Df Dent. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Df Dent Small has no effect on the direction of Astor Long/short i.e., Astor Long/short and Df Dent go up and down completely randomly.
Pair Corralation between Astor Long/short and Df Dent
Assuming the 90 days horizon Astor Longshort Fund is expected to generate 0.52 times more return on investment than Df Dent. However, Astor Longshort Fund is 1.94 times less risky than Df Dent. It trades about -0.19 of its potential returns per unit of risk. Df Dent Small is currently generating about -0.31 per unit of risk. If you would invest 1,287 in Astor Longshort Fund on December 5, 2024 and sell it today you would lose (25.00) from holding Astor Longshort Fund or give up 1.94% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 95.45% |
Values | Daily Returns |
Astor Longshort Fund vs. Df Dent Small
Performance |
Timeline |
Astor Long/short |
Df Dent Small |
Astor Long/short and Df Dent Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Astor Long/short and Df Dent
The main advantage of trading using opposite Astor Long/short and Df Dent positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Astor Long/short position performs unexpectedly, Df Dent 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 Df Dent will offset losses from the drop in Df Dent's long position.Astor Long/short vs. Lord Abbett Intermediate | Astor Long/short vs. Prudential California Muni | Astor Long/short vs. Us Government Securities | Astor Long/short vs. Alpine Ultra Short |
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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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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