Correlation Between Astar and Xtrackers Russell

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

By analyzing existing cross correlation between Astar and Xtrackers Russell 2000, you can compare the effects of market volatilities on Astar and Xtrackers Russell 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 Russell. Check out your portfolio center. Please also check ongoing floating volatility patterns of Astar and Xtrackers Russell.

Diversification Opportunities for Astar and Xtrackers Russell

0.51

Correlation Coefficient

Astar  Xtrackers Russell

Very weak diversification

The 3 months correlation between Astar and Xtrackers is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Astar and Xtrackers Russell 2000 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xtrackers Russell 2000 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 Russell. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xtrackers Russell 2000 has no effect on the direction of Astar i.e., Astar and Xtrackers Russell go up and down completely randomly.

Pair Corralation between Astar and Xtrackers Russell

Assuming the 90 days trading horizon Astar is expected to under-perform the Xtrackers Russell. In addition to that, Astar is 4.31 times more volatile than Xtrackers Russell 2000. It trades about -0.19 of its total potential returns per unit of risk. Xtrackers Russell 2000 is currently generating about -0.15 per unit of volatility. If you would invest  2,606,950  in Xtrackers Russell 2000 on December 24, 2024 and sell it today you would lose (270,300) from holding Xtrackers Russell 2000 or give up 10.37% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	96.88%
Values	Daily Returns

Astar  vs.  Xtrackers Russell 2000

Astar

Risk-Adjusted Performance

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 unsteady performance in the last few months, the Crypto's fundamental indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for Astar shareholders.

Xtrackers Russell 2000

Risk-Adjusted Performance

Very Weak

Over the last 90 days Xtrackers Russell 2000 has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Etf's basic 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 Xtrackers Russell

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

The idea behind Astar and Xtrackers Russell 2000 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.