Correlation Between Balanced Strategy and Astor Star

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

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

Diversification Opportunities for Balanced Strategy and Astor Star

0.98

Correlation Coefficient

Balanced Strategy  Astor Star

Almost no diversification

The 3 months correlation between Balanced and Astor is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Balanced Strategy Fund and Astor Star Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Astor Star Fund and Balanced Strategy 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 Balanced Strategy Fund are associated (or correlated) with Astor Star. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Astor Star Fund has no effect on the direction of Balanced Strategy i.e., Balanced Strategy and Astor Star go up and down completely randomly.

Pair Corralation between Balanced Strategy and Astor Star

Assuming the 90 days horizon Balanced Strategy Fund is expected to generate 1.06 times more return on investment than Astor Star. However, Balanced Strategy is 1.06 times more volatile than Astor Star Fund. It trades about 0.27 of its potential returns per unit of risk. Astor Star Fund is currently generating about 0.23 per unit of risk. If you would invest  1,087  in Balanced Strategy Fund on May 28, 2025 and sell it today you would earn a total of  74.00  from holding Balanced Strategy Fund or generate 6.81% return on investment over 90 days.

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

Balanced Strategy Fund  vs.  Astor Star Fund

Balanced Strategy

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Balanced Strategy Fund are ranked lower than 20 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Balanced Strategy may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Astor Star Fund

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Astor Star Fund are ranked lower than 17 (%) of all funds and portfolios of funds over the last 90 days. 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.

Pair Trading with Balanced Strategy and Astor Star

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

The idea behind Balanced Strategy Fund and Astor Star 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.