Correlation Between Astor Longshort and Short Duration

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

Diversification Opportunities for Astor Longshort and Short Duration

0.95

Correlation Coefficient

Astor Longshort  Short Duration

Almost no diversification

The 3 months correlation between Astor and Short is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Astor Longshort Fund and Short Duration Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Short Duration Municipal 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 Short Duration. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Short Duration Municipal has no effect on the direction of Astor Longshort i.e., Astor Longshort and Short Duration go up and down completely randomly.

Pair Corralation between Astor Longshort and Short Duration

Assuming the 90 days horizon Astor Longshort Fund is expected to generate 4.93 times more return on investment than Short Duration. However, Astor Longshort is 4.93 times more volatile than Short Duration Municipal. It trades about 0.27 of its potential returns per unit of risk. Short Duration Municipal is currently generating about 0.23 per unit of risk. If you would invest  1,240  in Astor Longshort Fund on May 1, 2025 and sell it today you would earn a total of  82.00  from holding Astor Longshort Fund or generate 6.61% return on investment over 90 days.

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

Astor Longshort Fund  vs.  Short Duration Municipal

Astor Longshort

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Astor Longshort Fund are ranked lower than 21 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward indicators, Astor Longshort may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Short Duration Municipal

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Short Duration Municipal are ranked lower than 17 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Short Duration is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Astor Longshort and Short Duration

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

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