Correlation Between Betashares Asia and SPDR SPASX
Can any of the company-specific risk be diversified away by investing in both Betashares Asia and SPDR SPASX 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 SPDR SPASX 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 SPDR SPASX 200, you can compare the effects of market volatilities on Betashares Asia and SPDR SPASX 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 SPDR SPASX. Check out your portfolio center. Please also check ongoing floating volatility patterns of Betashares Asia and SPDR SPASX.
Diversification Opportunities for Betashares Asia and SPDR SPASX
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Betashares and SPDR is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Betashares Asia Technology and SPDR SPASX 200 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR SPASX 200 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 SPDR SPASX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR SPASX 200 has no effect on the direction of Betashares Asia i.e., Betashares Asia and SPDR SPASX go up and down completely randomly.
Pair Corralation between Betashares Asia and SPDR SPASX
Assuming the 90 days trading horizon Betashares Asia is expected to generate 1.02 times less return on investment than SPDR SPASX. In addition to that, Betashares Asia is 2.13 times more volatile than SPDR SPASX 200. It trades about 0.05 of its total potential returns per unit of risk. SPDR SPASX 200 is currently generating about 0.11 per unit of volatility. If you would invest 6,906 in SPDR SPASX 200 on September 1, 2024 and sell it today you would earn a total of 730.00 from holding SPDR SPASX 200 or generate 10.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.23% |
| Values | Daily Returns |
Betashares Asia Technology vs. SPDR SPASX 200
Performance |
| Timeline |
| Betashares Asia Tech |
| SPDR SPASX 200 |
Betashares Asia and SPDR SPASX Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Betashares Asia and SPDR SPASX
The main advantage of trading using opposite Betashares Asia and SPDR SPASX positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Betashares Asia position performs unexpectedly, SPDR SPASX 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 SPDR SPASX will offset losses from the drop in SPDR SPASX's long position.| Betashares Asia vs. Betashares Australian Major | Betashares Asia vs. Betashares Wealth Builder | Betashares Asia vs. Betashares Australian Cash | Betashares Asia vs. Betashares Australian Bank |
| SPDR SPASX vs. BetaShares Global Government | SPDR SPASX vs. BetaShares Geared Australian | SPDR SPASX vs. BetaShares Australian Government | SPDR SPASX vs. BetaShares Global Robotics |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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