Correlation Between BetaShares Crypto and ETFS FANG
Can any of the company-specific risk be diversified away by investing in both BetaShares Crypto and ETFS FANG 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 Crypto and ETFS FANG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BetaShares Crypto Innovators and ETFS FANG ETF, you can compare the effects of market volatilities on BetaShares Crypto and ETFS FANG 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 Crypto with a short position of ETFS FANG. Check out your portfolio center. Please also check ongoing floating volatility patterns of BetaShares Crypto and ETFS FANG.
Diversification Opportunities for BetaShares Crypto and ETFS FANG
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between BetaShares and ETFS is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding BetaShares Crypto Innovators and ETFS FANG ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ETFS FANG ETF and BetaShares Crypto 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 Crypto Innovators are associated (or correlated) with ETFS FANG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ETFS FANG ETF has no effect on the direction of BetaShares Crypto i.e., BetaShares Crypto and ETFS FANG go up and down completely randomly.
Pair Corralation between BetaShares Crypto and ETFS FANG
Assuming the 90 days trading horizon BetaShares Crypto is expected to generate 10.38 times less return on investment than ETFS FANG. In addition to that, BetaShares Crypto is 2.85 times more volatile than ETFS FANG ETF. It trades about 0.01 of its total potential returns per unit of risk. ETFS FANG ETF is currently generating about 0.26 per unit of volatility. If you would invest 2,961 in ETFS FANG ETF on October 26, 2024 and sell it today you would earn a total of 428.00 from holding ETFS FANG ETF or generate 14.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 97.62% |
| Values | Daily Returns |
BetaShares Crypto Innovators vs. ETFS FANG ETF
Performance |
| Timeline |
| BetaShares Crypto |
| ETFS FANG ETF |
BetaShares Crypto and ETFS FANG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BetaShares Crypto and ETFS FANG
The main advantage of trading using opposite BetaShares Crypto and ETFS FANG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BetaShares Crypto position performs unexpectedly, ETFS FANG 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 ETFS FANG will offset losses from the drop in ETFS FANG's long position.| BetaShares Crypto vs. VanEck Global Listed | BetaShares Crypto vs. BetaShares Global Government | BetaShares Crypto vs. BetaShares Geared Australian | BetaShares Crypto vs. Global X Semiconductor |
| ETFS FANG vs. VanEck Global Listed | ETFS FANG vs. BetaShares Crypto Innovators | ETFS FANG vs. BetaShares Global Government | ETFS FANG vs. BetaShares Geared Australian |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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