Correlation Between SPDR SPASX and BetaShares Climate
Can any of the company-specific risk be diversified away by investing in both SPDR SPASX and BetaShares Climate 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 Climate 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 Climate Change, you can compare the effects of market volatilities on SPDR SPASX and BetaShares Climate 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 Climate. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR SPASX and BetaShares Climate.
Diversification Opportunities for SPDR SPASX and BetaShares Climate
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between SPDR and BetaShares is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding SPDR SPASX 200 and BetaShares Climate Change in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BetaShares Climate Change 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 Climate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BetaShares Climate Change has no effect on the direction of SPDR SPASX i.e., SPDR SPASX and BetaShares Climate go up and down completely randomly.
Pair Corralation between SPDR SPASX and BetaShares Climate
Assuming the 90 days trading horizon SPDR SPASX 200 is expected to generate 0.63 times more return on investment than BetaShares Climate. However, SPDR SPASX 200 is 1.59 times less risky than BetaShares Climate. It trades about 0.08 of its potential returns per unit of risk. BetaShares Climate Change is currently generating about -0.05 per unit of risk. If you would invest 2,223 in SPDR SPASX 200 on August 26, 2024 and sell it today you would earn a total of 470.00 from holding SPDR SPASX 200 or generate 21.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPDR SPASX 200 vs. BetaShares Climate Change
Performance |
| Timeline |
| SPDR SPASX 200 |
| BetaShares Climate Change |
SPDR SPASX and BetaShares Climate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR SPASX and BetaShares Climate
The main advantage of trading using opposite SPDR SPASX and BetaShares Climate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR SPASX position performs unexpectedly, BetaShares Climate 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 Climate will offset losses from the drop in BetaShares Climate'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 |
| BetaShares Climate vs. CD Private Equity | BetaShares Climate vs. SPDR SPASX 200 | BetaShares Climate vs. Ecofibre | BetaShares Climate vs. iShares Global Healthcare |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
Other Complementary Tools
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Fundamental Analysis View fundamental data based on most recent published financial statements |