Correlation Between Beta ETF and Beta MWIG40TR

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Can any of the company-specific risk be diversified away by investing in both Beta ETF and Beta MWIG40TR 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 Beta ETF and Beta MWIG40TR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Beta ETF WIG20lev and Beta mWIG40TR Portfelowy, you can compare the effects of market volatilities on Beta ETF and Beta MWIG40TR 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 Beta ETF with a short position of Beta MWIG40TR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beta ETF and Beta MWIG40TR.

Diversification Opportunities for Beta ETF and Beta MWIG40TR

0.86
  Correlation Coefficient

Very poor diversification

The 3 months correlation between Beta and Beta is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Beta ETF WIG20lev and Beta mWIG40TR Portfelowy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beta mWIG40TR Portfelowy and Beta ETF 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 Beta ETF WIG20lev are associated (or correlated) with Beta MWIG40TR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beta mWIG40TR Portfelowy has no effect on the direction of Beta ETF i.e., Beta ETF and Beta MWIG40TR go up and down completely randomly.

Pair Corralation between Beta ETF and Beta MWIG40TR

Assuming the 90 days trading horizon Beta ETF WIG20lev is expected to generate 2.59 times more return on investment than Beta MWIG40TR. However, Beta ETF is 2.59 times more volatile than Beta mWIG40TR Portfelowy. It trades about 0.24 of its potential returns per unit of risk. Beta mWIG40TR Portfelowy is currently generating about 0.19 per unit of risk. If you would invest  4,252  in Beta ETF WIG20lev on November 27, 2024 and sell it today you would earn a total of  618.00  from holding Beta ETF WIG20lev or generate 14.53% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthStrong
Accuracy100.0%
ValuesDaily Returns

Beta ETF WIG20lev  vs.  Beta mWIG40TR Portfelowy

 Performance 
       Timeline  
Beta ETF WIG20lev 

Risk-Adjusted Performance

Solid

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Beta ETF WIG20lev are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Beta ETF sustained solid returns over the last few months and may actually be approaching a breakup point.
Beta mWIG40TR Portfelowy 

Risk-Adjusted Performance

Solid

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Beta mWIG40TR Portfelowy are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Beta MWIG40TR sustained solid returns over the last few months and may actually be approaching a breakup point.

Beta ETF and Beta MWIG40TR Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Beta ETF and Beta MWIG40TR

The main advantage of trading using opposite Beta ETF and Beta MWIG40TR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beta ETF position performs unexpectedly, Beta MWIG40TR 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 Beta MWIG40TR will offset losses from the drop in Beta MWIG40TR's long position.
Beta ETF vs. Beta mWIG40TR Portfelowy
Beta ETF vs. Beta ETF Nasdaq 100
Beta ETF vs. Beta ETF Nasdaq 100
Beta ETF vs. Beta WIG20TR Portfelowy
The idea behind Beta ETF WIG20lev and Beta mWIG40TR Portfelowy pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
Beta MWIG40TR vs. Beta ETF Nasdaq 100
Beta MWIG40TR vs. Beta ETF Nasdaq 100
Beta MWIG40TR vs. Beta WIG20TR Portfelowy
Beta MWIG40TR vs. Beta ETF WIG20Short
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.

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