Correlation Between Betashares Asia and Vanguard MSCI
Can any of the company-specific risk be diversified away by investing in both Betashares Asia and Vanguard 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 Vanguard 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 Vanguard MSCI International, you can compare the effects of market volatilities on Betashares Asia and Vanguard 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 Vanguard MSCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Betashares Asia and Vanguard MSCI.
Diversification Opportunities for Betashares Asia and Vanguard MSCI
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Betashares and Vanguard is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Betashares Asia Technology and Vanguard MSCI International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard MSCI Intern 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 Vanguard MSCI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard MSCI Intern has no effect on the direction of Betashares Asia i.e., Betashares Asia and Vanguard MSCI go up and down completely randomly.
Pair Corralation between Betashares Asia and Vanguard MSCI
Assuming the 90 days trading horizon Betashares Asia is expected to generate 1.3 times less return on investment than Vanguard MSCI. In addition to that, Betashares Asia is 1.7 times more volatile than Vanguard MSCI International. It trades about 0.05 of its total potential returns per unit of risk. Vanguard MSCI International is currently generating about 0.1 per unit of volatility. If you would invest 7,783 in Vanguard MSCI International on September 1, 2024 and sell it today you would earn a total of 3,027 from holding Vanguard MSCI International or generate 38.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.78% |
| Values | Daily Returns |
Betashares Asia Technology vs. Vanguard MSCI International
Performance |
| Timeline |
| Betashares Asia Tech |
| Vanguard MSCI Intern |
Betashares Asia and Vanguard MSCI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Betashares Asia and Vanguard MSCI
The main advantage of trading using opposite Betashares Asia and Vanguard MSCI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Betashares Asia position performs unexpectedly, Vanguard 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 Vanguard MSCI will offset losses from the drop in Vanguard MSCI'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 |
| Vanguard MSCI vs. BetaShares Global Banks | Vanguard MSCI vs. Beta Shares SPASX | Vanguard MSCI vs. SPDR SPASX 200 | Vanguard MSCI vs. Vanguard Australian Property |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
Other Complementary Tools
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. |