Correlation Between Royce International and Astor Long/short

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

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

Diversification Opportunities for Royce International and Astor Long/short

0.58

Correlation Coefficient

Royce International  Astor Long/short

Very weak diversification

The 3 months correlation between Royce and Astor is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Royce International Small Cap and Astor Longshort Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Astor Long/short and Royce International 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 Royce International Small Cap are associated (or correlated) with Astor Long/short. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Astor Long/short has no effect on the direction of Royce International i.e., Royce International and Astor Long/short go up and down completely randomly.

Pair Corralation between Royce International and Astor Long/short

Assuming the 90 days horizon Royce International is expected to generate 1.53 times less return on investment than Astor Long/short. In addition to that, Royce International is 2.41 times more volatile than Astor Longshort Fund. It trades about 0.07 of its total potential returns per unit of risk. Astor Longshort Fund is currently generating about 0.24 per unit of volatility. If you would invest  1,301  in Astor Longshort Fund on July 4, 2025 and sell it today you would earn a total of  62.00  from holding Astor Longshort Fund or generate 4.77% return on investment over 90 days.

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

Royce International Small Cap  vs.  Astor Longshort Fund

Royce International

Risk-Adjusted Performance

Soft

Compared to the overall equity markets, risk-adjusted returns on investments in Royce International Small Cap are ranked lower than 5 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Royce International is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Astor Long/short

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 Long/short is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Royce International and Astor Long/short

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

The idea behind Royce International Small 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.