Correlation Between BetaShares Geared and SPDR SP
Can any of the company-specific risk be diversified away by investing in both BetaShares Geared and SPDR SP 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 Geared and SPDR SP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BetaShares Geared Equity and SPDR SP World, you can compare the effects of market volatilities on BetaShares Geared and SPDR SP 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 Geared with a short position of SPDR SP. Check out your portfolio center. Please also check ongoing floating volatility patterns of BetaShares Geared and SPDR SP.
Diversification Opportunities for BetaShares Geared and SPDR SP
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between BetaShares and SPDR is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding BetaShares Geared Equity and SPDR SP World in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR SP World and BetaShares Geared 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 Geared Equity are associated (or correlated) with SPDR SP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR SP World has no effect on the direction of BetaShares Geared i.e., BetaShares Geared and SPDR SP go up and down completely randomly.
Pair Corralation between BetaShares Geared and SPDR SP
Assuming the 90 days trading horizon BetaShares Geared Equity is expected to generate 2.44 times more return on investment than SPDR SP. However, BetaShares Geared is 2.44 times more volatile than SPDR SP World. It trades about 0.13 of its potential returns per unit of risk. SPDR SP World is currently generating about 0.27 per unit of risk. If you would invest 4,151 in BetaShares Geared Equity on September 19, 2024 and sell it today you would earn a total of 483.00 from holding BetaShares Geared Equity or generate 11.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
BetaShares Geared Equity vs. SPDR SP World
Performance |
| Timeline |
| BetaShares Geared Equity |
| SPDR SP World |
BetaShares Geared and SPDR SP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BetaShares Geared and SPDR SP
The main advantage of trading using opposite BetaShares Geared and SPDR SP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BetaShares Geared position performs unexpectedly, SPDR SP 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 SPDR SP will offset losses from the drop in SPDR SP's long position.| BetaShares Geared vs. Betashares Asia Technology | BetaShares Geared vs. CD Private Equity | BetaShares Geared vs. BetaShares Australia 200 | BetaShares Geared vs. Australian High Interest |
| SPDR SP vs. BetaShares Geared Equity | SPDR SP vs. VanEck Vectors Australian | SPDR SP vs. Vanguard Total Market | SPDR SP vs. VanEck Morningstar Wide |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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