Correlation Between Astar and IREIT MarketVector

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

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

Diversification Opportunities for Astar and IREIT MarketVector

0.06

Correlation Coefficient

Astar  IREIT MarketVector

Significant diversification

The 3 months correlation between Astar and IREIT is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Astar and iREIT MarketVector in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iREIT MarketVector 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 IREIT MarketVector. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iREIT MarketVector has no effect on the direction of Astar i.e., Astar and IREIT MarketVector go up and down completely randomly.

Pair Corralation between Astar and IREIT MarketVector

Assuming the 90 days trading horizon Astar is expected to generate 4.63 times more return on investment than IREIT MarketVector. However, Astar is 4.63 times more volatile than iREIT MarketVector. It trades about -0.01 of its potential returns per unit of risk. iREIT MarketVector is currently generating about -0.39 per unit of risk. If you would invest  6.98  in Astar on October 9, 2024 and sell it today you would lose (0.25) from holding Astar or give up 3.58% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	95.0%
Values	Daily Returns

Astar  vs.  iREIT MarketVector

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.

iREIT MarketVector

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days iREIT MarketVector has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Etf's technical and fundamental indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the exchange-traded fund private investors.

Pair Trading with Astar and IREIT MarketVector

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

The idea behind Astar and iREIT MarketVector 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.

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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.