Correlation Between Astar and IShares Large
Can any of the company-specific risk be diversified away by investing in both Astar and IShares Large 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 Large into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Astar and iShares Large Cap, you can compare the effects of market volatilities on Astar and IShares Large 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 Large. Check out your portfolio center. Please also check ongoing floating volatility patterns of Astar and IShares Large.
Diversification Opportunities for Astar and IShares Large
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Astar and IShares is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Astar and iShares Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Large Cap 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 Large. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Large Cap has no effect on the direction of Astar i.e., Astar and IShares Large go up and down completely randomly.
Pair Corralation between Astar and IShares Large
Assuming the 90 days trading horizon Astar is expected to generate 29.2 times more return on investment than IShares Large. However, Astar is 29.2 times more volatile than iShares Large Cap. It trades about 0.01 of its potential returns per unit of risk. iShares Large Cap is currently generating about 0.15 per unit of risk. If you would invest 7.90 in Astar on November 2, 2024 and sell it today you would lose (2.93) from holding Astar or give up 37.09% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 49.66% |
| Values | Daily Returns |
Astar vs. iShares Large Cap
Performance |
| Timeline |
| Astar |
| iShares Large Cap |
Astar and IShares Large Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Astar and IShares Large
The main advantage of trading using opposite Astar and IShares Large positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Astar position performs unexpectedly, IShares Large 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 Large will offset losses from the drop in IShares Large's long position.The idea behind Astar and iShares Large Cap 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.| IShares Large vs. FT Vest Equity | IShares Large vs. Northern Lights | IShares Large vs. Dimensional International High | IShares Large vs. First Trust Exchange Traded |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios |