Correlation Between IShares Trust and Aster DM

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

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

Diversification Opportunities for IShares Trust and Aster DM

0.75

Correlation Coefficient

IShares Trust  Aster DM

Poor diversification

The 3 months correlation between IShares and Aster is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding iShares Trust and Aster DM Healthcare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aster DM Healthcare and IShares Trust 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 iShares Trust are associated (or correlated) with Aster DM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aster DM Healthcare has no effect on the direction of IShares Trust i.e., IShares Trust and Aster DM go up and down completely randomly.

Pair Corralation between IShares Trust and Aster DM

Given the investment horizon of 90 days IShares Trust is expected to generate 4.84 times less return on investment than Aster DM. But when comparing it to its historical volatility, iShares Trust is 14.27 times less risky than Aster DM. It trades about 0.3 of its potential returns per unit of risk. Aster DM Healthcare is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  52,065  in Aster DM Healthcare on May 6, 2025 and sell it today you would earn a total of  7,475  from holding Aster DM Healthcare or generate 14.36% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	95.38%
Values	Daily Returns

iShares Trust   vs.  Aster DM Healthcare

iShares Trust

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in iShares Trust are ranked lower than 24 (%) of all global equities and portfolios over the last 90 days. 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.

Aster DM Healthcare

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Aster DM Healthcare are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of very unsteady basic indicators, Aster DM displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with IShares Trust and Aster DM

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

The idea behind iShares Trust and Aster DM Healthcare 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.