Correlation Between SPDR SPASX and BetaShares Global
Can any of the company-specific risk be diversified away by investing in both SPDR SPASX and BetaShares 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 SPDR SPASX and BetaShares Global 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 Global Banks, you can compare the effects of market volatilities on SPDR SPASX and BetaShares 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 SPDR SPASX with a short position of BetaShares Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR SPASX and BetaShares Global.
Diversification Opportunities for SPDR SPASX and BetaShares Global
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SPDR and BetaShares is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding SPDR SPASX 200 and BetaShares Global Banks in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BetaShares Global Banks 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 Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BetaShares Global Banks has no effect on the direction of SPDR SPASX i.e., SPDR SPASX and BetaShares Global go up and down completely randomly.
Pair Corralation between SPDR SPASX and BetaShares Global
Assuming the 90 days trading horizon SPDR SPASX 200 is expected to under-perform the BetaShares Global. But the etf apears to be less risky and, when comparing its historical volatility, SPDR SPASX 200 is 1.36 times less risky than BetaShares Global. The etf trades about -0.1 of its potential returns per unit of risk. The BetaShares Global Banks is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 905.00 in BetaShares Global Banks on November 27, 2024 and sell it today you would earn a total of 12.00 from holding BetaShares Global Banks or generate 1.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPDR SPASX 200 vs. BetaShares Global Banks
Performance |
| Timeline |
| SPDR SPASX 200 |
| BetaShares Global Banks |
SPDR SPASX and BetaShares Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR SPASX and BetaShares Global
The main advantage of trading using opposite SPDR SPASX and BetaShares Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR SPASX position performs unexpectedly, BetaShares 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 BetaShares Global will offset losses from the drop in BetaShares Global'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 |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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