Correlation Between Astor Star and Glenmede International

Can any of the company-specific risk be diversified away by investing in both Astor Star and Glenmede International 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 Star and Glenmede International into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Astor Star Fund and Glenmede International Secured, you can compare the effects of market volatilities on Astor Star and Glenmede International 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 Star with a short position of Glenmede International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Astor Star and Glenmede International.

Diversification Opportunities for Astor Star and Glenmede International

0.36

Correlation Coefficient

Astor Star  Glenmede International

Weak diversification

The 3 months correlation between Astor and Glenmede is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Astor Star Fund and Glenmede International Secured in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Glenmede International and Astor Star 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 Star Fund are associated (or correlated) with Glenmede International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Glenmede International has no effect on the direction of Astor Star i.e., Astor Star and Glenmede International go up and down completely randomly.

Pair Corralation between Astor Star and Glenmede International

Assuming the 90 days horizon Astor Star Fund is expected to generate 0.3 times more return on investment than Glenmede International. However, Astor Star Fund is 3.37 times less risky than Glenmede International. It trades about -0.24 of its potential returns per unit of risk. Glenmede International Secured is currently generating about -0.25 per unit of risk. If you would invest  1,683  in Astor Star Fund on October 8, 2024 and sell it today you would lose (96.00) from holding Astor Star Fund or give up 5.7% of portfolio value over 90 days.

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

Astor Star Fund  vs.  Glenmede International Secured

Astor Star Fund

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Astor Star Fund has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Astor Star is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Glenmede International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Glenmede International Secured has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's forward indicators remain fairly strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Pair Trading with Astor Star and Glenmede International

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

The idea behind Astor Star Fund and Glenmede International Secured 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.

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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.