Correlation Between Astor Star and Western Asset
Can any of the company-specific risk be diversified away by investing in both Astor Star and Western Asset 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 Star and Western Asset into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Astor Star Fund and Western Asset E, you can compare the effects of market volatilities on Astor Star and Western Asset 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 Star with a short position of Western Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Astor Star and Western Asset.
Diversification Opportunities for Astor Star and Western Asset
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Astor and Western is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Astor Star Fund and Western Asset E in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Asset E and Astor Star 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 Star Fund are associated (or correlated) with Western Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Asset E has no effect on the direction of Astor Star i.e., Astor Star and Western Asset go up and down completely randomly.
Pair Corralation between Astor Star and Western Asset
Assuming the 90 days horizon Astor Star Fund is expected to generate 1.26 times more return on investment than Western Asset. However, Astor Star is 1.26 times more volatile than Western Asset E. It trades about 0.31 of its potential returns per unit of risk. Western Asset E is currently generating about 0.1 per unit of risk. If you would invest 1,481 in Astor Star Fund on April 23, 2025 and sell it today you would earn a total of 122.00 from holding Astor Star Fund or generate 8.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.39% |
| Values | Daily Returns |
Astor Star Fund vs. Western Asset E
Performance |
| Timeline |
| Astor Star Fund |
| Western Asset E |
Astor Star and Western Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Astor Star and Western Asset
The main advantage of trading using opposite Astor Star and Western Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Astor Star position performs unexpectedly, Western Asset 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 Western Asset will offset losses from the drop in Western Asset's long position.| Astor Star vs. Astor Star Fund | Astor Star vs. Astor Star Fund | Astor Star vs. Astor Longshort Fund | Astor Star vs. Nasdaq 100 Fund Class |
| Western Asset vs. Transamerica Financial Life | Western Asset vs. Putnam Global Financials | Western Asset vs. Mesirow Financial Small | Western Asset vs. Prudential Financial Services |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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