Correlation Between Performance Trust and Astor Longshort

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

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

Diversification Opportunities for Performance Trust and Astor Longshort

-0.4

Correlation Coefficient

Performance Trust  Astor Longshort

Very good diversification

The 3 months correlation between Performance and Astor is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Performance Trust Strategic and Astor Longshort Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Astor Longshort and Performance Trust 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 Performance Trust Strategic are associated (or correlated) with Astor Longshort. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Astor Longshort has no effect on the direction of Performance Trust i.e., Performance Trust and Astor Longshort go up and down completely randomly.

Pair Corralation between Performance Trust and Astor Longshort

Assuming the 90 days horizon Performance Trust Strategic is expected to under-perform the Astor Longshort. But the mutual fund apears to be less risky and, when comparing its historical volatility, Performance Trust Strategic is 1.07 times less risky than Astor Longshort. The mutual fund trades about -0.13 of its potential returns per unit of risk. The Astor Longshort Fund is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  1,370  in Astor Longshort Fund on September 16, 2024 and sell it today you would earn a total of  51.00  from holding Astor Longshort Fund or generate 3.72% return on investment over 90 days.

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

Performance Trust Strategic  vs.  Astor Longshort Fund

Performance Trust

Risk-Adjusted Performance

0 of 100

Very Weak

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

Astor Longshort

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Astor Longshort Fund are ranked lower than 13 (%) 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.

Pair Trading with Performance Trust and Astor Longshort

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

The idea behind Performance Trust Strategic and Astor Longshort Fund 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.