Correlation Between Betashares Asia and VanEck MSCI
Can any of the company-specific risk be diversified away by investing in both Betashares Asia and VanEck MSCI 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 Betashares Asia and VanEck MSCI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Betashares Asia Technology and VanEck MSCI International, you can compare the effects of market volatilities on Betashares Asia and VanEck MSCI 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 Betashares Asia with a short position of VanEck MSCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Betashares Asia and VanEck MSCI.
Diversification Opportunities for Betashares Asia and VanEck MSCI
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Betashares and VanEck is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Betashares Asia Technology and VanEck MSCI International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VanEck MSCI International and Betashares Asia 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 Betashares Asia Technology are associated (or correlated) with VanEck MSCI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VanEck MSCI International has no effect on the direction of Betashares Asia i.e., Betashares Asia and VanEck MSCI go up and down completely randomly.
Pair Corralation between Betashares Asia and VanEck MSCI
Assuming the 90 days trading horizon Betashares Asia is expected to generate 1.21 times less return on investment than VanEck MSCI. In addition to that, Betashares Asia is 1.34 times more volatile than VanEck MSCI International. It trades about 0.06 of its total potential returns per unit of risk. VanEck MSCI International is currently generating about 0.09 per unit of volatility. If you would invest 2,059 in VanEck MSCI International on August 26, 2024 and sell it today you would earn a total of 1,068 from holding VanEck MSCI International or generate 51.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Betashares Asia Technology vs. VanEck MSCI International
Performance |
| Timeline |
| Betashares Asia Tech |
| VanEck MSCI International |
Betashares Asia and VanEck MSCI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Betashares Asia and VanEck MSCI
The main advantage of trading using opposite Betashares Asia and VanEck MSCI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Betashares Asia position performs unexpectedly, VanEck MSCI 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 VanEck MSCI will offset losses from the drop in VanEck MSCI's long position.| Betashares Asia vs. BetaShares Global Government | Betashares Asia vs. BetaShares Geared Australian | Betashares Asia vs. Global X Semiconductor | Betashares Asia vs. iShares UBS Government |
| VanEck MSCI vs. CD Private Equity | VanEck MSCI vs. SPDR SPASX 200 | VanEck MSCI vs. Ecofibre | VanEck MSCI vs. iShares Global Healthcare |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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