Correlation Between Astar and IShares Trust

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

By analyzing existing cross correlation between Astar and iShares Trust , you can compare the effects of market volatilities on Astar and IShares Trust 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 IShares Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of Astar and IShares Trust.

Diversification Opportunities for Astar and IShares Trust

0.48

Correlation Coefficient

Astar  IShares Trust

Very weak diversification

The 3 months correlation between Astar and IShares is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Astar and iShares Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Trust 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 IShares Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Trust has no effect on the direction of Astar i.e., Astar and IShares Trust go up and down completely randomly.

Pair Corralation between Astar and IShares Trust

Assuming the 90 days trading horizon Astar is expected to generate 16.77 times more return on investment than IShares Trust. However, Astar is 16.77 times more volatile than iShares Trust . It trades about 0.01 of its potential returns per unit of risk. iShares Trust is currently generating about -0.02 per unit of risk. If you would invest  5.65  in Astar on October 27, 2024 and sell it today you would lose (0.41) from holding Astar or give up 7.26% of portfolio value over 90 days.

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

Astar  vs.  iShares Trust

Astar

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Astar has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound fundamental indicators, Astar is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

iShares Trust

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days iShares Trust has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable fundamental indicators, IShares Trust is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Astar and IShares Trust

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

The idea behind Astar and iShares Trust 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.