Correlation Between Swan Defined and Astor Longshort

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

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

Diversification Opportunities for Swan Defined and Astor Longshort

0.52

Correlation Coefficient

Swan Defined  Astor Longshort

Very weak diversification

The 3 months correlation between Swan and Astor is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Swan Defined Risk and Astor Longshort Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Astor Longshort and Swan Defined 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 Swan Defined Risk 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 Swan Defined i.e., Swan Defined and Astor Longshort go up and down completely randomly.

Pair Corralation between Swan Defined and Astor Longshort

Assuming the 90 days horizon Swan Defined Risk is expected to generate 0.92 times more return on investment than Astor Longshort. However, Swan Defined Risk is 1.09 times less risky than Astor Longshort. It trades about 0.36 of its potential returns per unit of risk. Astor Longshort Fund is currently generating about 0.27 per unit of risk. If you would invest  1,280  in Swan Defined Risk on April 29, 2025 and sell it today you would earn a total of  104.00  from holding Swan Defined Risk or generate 8.13% return on investment over 90 days.

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

Swan Defined Risk  vs.  Astor Longshort Fund

Swan Defined Risk

Risk-Adjusted Performance

Strong

Over the last 90 days Swan Defined Risk has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly weak fundamental indicators, Swan Defined may actually be approaching a critical reversion point that can send shares even higher in August 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 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.

Pair Trading with Swan Defined and Astor Longshort

The main advantage of trading using opposite Swan Defined and Astor Longshort positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Swan Defined 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 Swan Defined Risk 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.