Correlation Between BetaShares Australian and Betashares Asia
Can any of the company-specific risk be diversified away by investing in both BetaShares Australian and Betashares Asia 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 Australian and Betashares Asia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BetaShares Australian Investment and Betashares Asia Technology, you can compare the effects of market volatilities on BetaShares Australian and Betashares Asia 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 Australian with a short position of Betashares Asia. Check out your portfolio center. Please also check ongoing floating volatility patterns of BetaShares Australian and Betashares Asia.
Diversification Opportunities for BetaShares Australian and Betashares Asia
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between BetaShares and Betashares is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding BetaShares Australian Investme and Betashares Asia Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Betashares Asia Tech and BetaShares Australian 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 Australian Investment are associated (or correlated) with Betashares Asia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Betashares Asia Tech has no effect on the direction of BetaShares Australian i.e., BetaShares Australian and Betashares Asia go up and down completely randomly.
Pair Corralation between BetaShares Australian and Betashares Asia
Assuming the 90 days trading horizon BetaShares Australian is expected to generate 2.72 times less return on investment than Betashares Asia. But when comparing it to its historical volatility, BetaShares Australian Investment is 3.17 times less risky than Betashares Asia. It trades about 0.06 of its potential returns per unit of risk. Betashares Asia Technology is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 704.00 in Betashares Asia Technology on August 30, 2024 and sell it today you would earn a total of 252.00 from holding Betashares Asia Technology or generate 35.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BetaShares Australian Investme vs. Betashares Asia Technology
Performance |
| Timeline |
| BetaShares Australian |
| Betashares Asia Tech |
BetaShares Australian and Betashares Asia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BetaShares Australian and Betashares Asia
The main advantage of trading using opposite BetaShares Australian and Betashares Asia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BetaShares Australian position performs unexpectedly, Betashares Asia 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 Betashares Asia will offset losses from the drop in Betashares Asia's long position.| BetaShares Australian vs. Betashares Asia Technology | BetaShares Australian vs. CD Private Equity | BetaShares Australian vs. BetaShares Australia 200 | BetaShares Australian vs. Australian High Interest |
| Betashares Asia vs. CD Private Equity | Betashares Asia vs. BetaShares Australia 200 | Betashares Asia vs. Australian High Interest | Betashares Asia vs. Airlie Australian Share |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
Other Complementary Tools
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing |