Correlation Between Astar and Xtrackers

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

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

Diversification Opportunities for Astar and Xtrackers

0.54

Correlation Coefficient

Astar  Xtrackers

Very weak diversification

The 3 months correlation between Astar and Xtrackers is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Astar and Xtrackers Ie Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xtrackers Ie Plc 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 Xtrackers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xtrackers Ie Plc has no effect on the direction of Astar i.e., Astar and Xtrackers go up and down completely randomly.

Pair Corralation between Astar and Xtrackers

Assuming the 90 days trading horizon Astar is expected to under-perform the Xtrackers. In addition to that, Astar is 5.63 times more volatile than Xtrackers Ie Plc. It trades about -0.15 of its total potential returns per unit of risk. Xtrackers Ie Plc is currently generating about 0.13 per unit of volatility. If you would invest  4,425  in Xtrackers Ie Plc on October 25, 2024 and sell it today you would earn a total of  92.00  from holding Xtrackers Ie Plc or generate 2.08% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	90.48%
Values	Daily Returns

Astar  vs.  Xtrackers Ie Plc

Astar

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Astar are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, Astar may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Xtrackers Ie Plc

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Xtrackers Ie Plc are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Xtrackers is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Astar and Xtrackers

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

The idea behind Astar and Xtrackers Ie Plc 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..