Correlation Between Betashares Asia and Vanguard Global
Can any of the company-specific risk be diversified away by investing in both Betashares Asia and Vanguard Global 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 Global 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 Global Minimum, you can compare the effects of market volatilities on Betashares Asia and Vanguard Global 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 Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Betashares Asia and Vanguard Global.
Diversification Opportunities for Betashares Asia and Vanguard Global
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Betashares and Vanguard is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Betashares Asia Technology and Vanguard Global Minimum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard Global Minimum 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 Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard Global Minimum has no effect on the direction of Betashares Asia i.e., Betashares Asia and Vanguard Global go up and down completely randomly.
Pair Corralation between Betashares Asia and Vanguard Global
Assuming the 90 days trading horizon Betashares Asia Technology is expected to under-perform the Vanguard Global. But the etf apears to be less risky and, when comparing its historical volatility, Betashares Asia Technology is 1.2 times less risky than Vanguard Global. The etf trades about -0.28 of its potential returns per unit of risk. The Vanguard Global Minimum is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 6,180 in Vanguard Global Minimum on September 1, 2024 and sell it today you would earn a total of 169.00 from holding Vanguard Global Minimum or generate 2.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Betashares Asia Technology vs. Vanguard Global Minimum
Performance |
| Timeline |
| Betashares Asia Tech |
| Vanguard Global Minimum |
Betashares Asia and Vanguard Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Betashares Asia and Vanguard Global
The main advantage of trading using opposite Betashares Asia and Vanguard Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Betashares Asia position performs unexpectedly, Vanguard Global 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 Global will offset losses from the drop in Vanguard Global'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 Global vs. Vanguard Global Aggregate | Vanguard Global vs. Vanguard Australian Fixed | Vanguard Global vs. Vanguard Global Infrastructure | Vanguard Global vs. Vanguard Global Value |
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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