Correlation Between Astar and Deutsche Post

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

By analyzing existing cross correlation between Astar and Deutsche Post AG, you can compare the effects of market volatilities on Astar and Deutsche Post 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 Astar with a short position of Deutsche Post. Check out your portfolio center. Please also check ongoing floating volatility patterns of Astar and Deutsche Post.

Diversification Opportunities for Astar and Deutsche Post

-0.51

Correlation Coefficient

Astar  Deutsche Post

Excellent diversification

The 3 months correlation between Astar and Deutsche is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Astar and Deutsche Post AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Deutsche Post AG and Astar 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 Astar are associated (or correlated) with Deutsche Post. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Deutsche Post AG has no effect on the direction of Astar i.e., Astar and Deutsche Post go up and down completely randomly.

Pair Corralation between Astar and Deutsche Post

Assuming the 90 days trading horizon Astar is expected to generate 4.3 times more return on investment than Deutsche Post. However, Astar is 4.3 times more volatile than Deutsche Post AG. It trades about 0.07 of its potential returns per unit of risk. Deutsche Post AG is currently generating about -0.16 per unit of risk. If you would invest  5.76  in Astar on October 9, 2024 and sell it today you would earn a total of  0.97  from holding Astar or generate 16.84% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	93.75%
Values	Daily Returns

Astar  vs.  Deutsche Post AG

Astar

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Astar are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, Astar exhibited solid returns over the last few months and may actually be approaching a breakup point.

Deutsche Post AG

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Deutsche Post AG has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest fragile performance, the Stock's essential indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with Astar and Deutsche Post

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

The idea behind Astar and Deutsche Post AG 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.