Correlation Between SPDR SPASX and BetaShares Australian
Can any of the company-specific risk be diversified away by investing in both SPDR SPASX and BetaShares Australian 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 SPDR SPASX and BetaShares Australian into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPDR SPASX 200 and BetaShares Australian Quality, you can compare the effects of market volatilities on SPDR SPASX and BetaShares Australian 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 SPDR SPASX with a short position of BetaShares Australian. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR SPASX and BetaShares Australian.
Diversification Opportunities for SPDR SPASX and BetaShares Australian
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between SPDR and BetaShares is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding SPDR SPASX 200 and BetaShares Australian Quality in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BetaShares Australian and SPDR SPASX 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 SPDR SPASX 200 are associated (or correlated) with BetaShares Australian. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BetaShares Australian has no effect on the direction of SPDR SPASX i.e., SPDR SPASX and BetaShares Australian go up and down completely randomly.
Pair Corralation between SPDR SPASX and BetaShares Australian
Assuming the 90 days trading horizon SPDR SPASX is expected to generate 1.59 times less return on investment than BetaShares Australian. But when comparing it to its historical volatility, SPDR SPASX 200 is 1.08 times less risky than BetaShares Australian. It trades about 0.11 of its potential returns per unit of risk. BetaShares Australian Quality is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 2,972 in BetaShares Australian Quality on September 2, 2024 and sell it today you would earn a total of 218.00 from holding BetaShares Australian Quality or generate 7.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPDR SPASX 200 vs. BetaShares Australian Quality
Performance |
| Timeline |
| SPDR SPASX 200 |
| BetaShares Australian |
SPDR SPASX and BetaShares Australian Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR SPASX and BetaShares Australian
The main advantage of trading using opposite SPDR SPASX and BetaShares Australian positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR SPASX position performs unexpectedly, BetaShares Australian 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 Australian will offset losses from the drop in BetaShares Australian's long position.| SPDR SPASX vs. SPDR SPASX 200 | SPDR SPASX vs. SPDR SPASX 50 | SPDR SPASX vs. SPDR MSCI World | SPDR SPASX vs. SPDR Dow Jones |
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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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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