Correlation Between Scharf Fund and Astonriver Road

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

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

Diversification Opportunities for Scharf Fund and Astonriver Road

0.56

Correlation Coefficient

Scharf Fund  Astonriver Road

Very weak diversification

The 3 months correlation between Scharf and Astonriver is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Scharf Fund Retail and Astonriver Road Independent in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Astonriver Road Inde and Scharf Fund 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 Scharf Fund Retail are associated (or correlated) with Astonriver Road. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Astonriver Road Inde has no effect on the direction of Scharf Fund i.e., Scharf Fund and Astonriver Road go up and down completely randomly.

Pair Corralation between Scharf Fund and Astonriver Road

Assuming the 90 days horizon Scharf Fund Retail is expected to under-perform the Astonriver Road. But the mutual fund apears to be less risky and, when comparing its historical volatility, Scharf Fund Retail is 2.1 times less risky than Astonriver Road. The mutual fund trades about -0.05 of its potential returns per unit of risk. The Astonriver Road Independent is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  1,022  in Astonriver Road Independent on October 22, 2024 and sell it today you would earn a total of  14.00  from holding Astonriver Road Independent or generate 1.37% return on investment over 90 days.

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

Scharf Fund Retail  vs.  Astonriver Road Independent

Scharf Fund Retail

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Scharf Fund Retail 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.

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 fairly strong forward indicators, Astonriver Road is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Scharf Fund and Astonriver Road

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

The idea behind Scharf Fund Retail and Astonriver Road Independent 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.