Correlation Between BetaShares Global and Dow Jones
Can any of the company-specific risk be diversified away by investing in both BetaShares Global and Dow Jones 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 Global and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BetaShares Global Banks and Dow Jones Industrial, you can compare the effects of market volatilities on BetaShares Global and Dow Jones 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 Global with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of BetaShares Global and Dow Jones.
Diversification Opportunities for BetaShares Global and Dow Jones
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between BetaShares and Dow is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding BetaShares Global Banks and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial and BetaShares Global 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 Global Banks are associated (or correlated) with Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of BetaShares Global i.e., BetaShares Global and Dow Jones go up and down completely randomly.
Pair Corralation between BetaShares Global and Dow Jones
Assuming the 90 days trading horizon BetaShares Global Banks is expected to generate 0.97 times more return on investment than Dow Jones. However, BetaShares Global Banks is 1.03 times less risky than Dow Jones. It trades about 0.28 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.21 per unit of risk. If you would invest 814.00 in BetaShares Global Banks on August 25, 2024 and sell it today you would earn a total of 49.00 from holding BetaShares Global Banks or generate 6.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
BetaShares Global Banks vs. Dow Jones Industrial
Performance |
| Timeline |
BetaShares Global and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
BetaShares Global Banks
Pair trading matchups for BetaShares Global
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with BetaShares Global and Dow Jones
The main advantage of trading using opposite BetaShares Global and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BetaShares Global position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.| BetaShares Global vs. BetaShares Global Government | BetaShares Global vs. BetaShares Geared Australian | BetaShares Global vs. Global X Semiconductor | BetaShares Global vs. iShares UBS Government |
| Dow Jones vs. Vistra Energy Corp | Dow Jones vs. Fluence Energy | Dow Jones vs. Old Republic International | Dow Jones vs. Empresa Distribuidora y |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
Other Complementary Tools
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance |