Correlation Between Optimum Small-mid and Astor Longshort

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

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

Diversification Opportunities for Optimum Small-mid and Astor Longshort

0.94

Correlation Coefficient

Optimum Small-mid  Astor Longshort

Almost no diversification

The 3 months correlation between Optimum and Astor is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Optimum Small Mid Cap and Astor Longshort Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Astor Longshort and Optimum Small-mid 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 Optimum Small Mid Cap 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 Optimum Small-mid i.e., Optimum Small-mid and Astor Longshort go up and down completely randomly.

Pair Corralation between Optimum Small-mid and Astor Longshort

Assuming the 90 days horizon Optimum Small Mid Cap is expected to generate 2.76 times more return on investment than Astor Longshort. However, Optimum Small-mid is 2.76 times more volatile than Astor Longshort Fund. It trades about 0.13 of its potential returns per unit of risk. Astor Longshort Fund is currently generating about 0.24 per unit of risk. If you would invest  1,293  in Optimum Small Mid Cap on May 3, 2025 and sell it today you would earn a total of  109.00  from holding Optimum Small Mid Cap or generate 8.43% return on investment over 90 days.

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

Optimum Small Mid Cap  vs.  Astor Longshort Fund

Optimum Small Mid

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Optimum Small Mid Cap are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Optimum Small-mid may actually be approaching a critical reversion point that can send shares even higher in September 2025.

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 19 (%) 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 Optimum Small-mid and Astor Longshort

The main advantage of trading using opposite Optimum Small-mid and Astor Longshort positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Optimum Small-mid 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 Optimum Small Mid Cap 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.