Correlation Between ETFS Physical and Betashares Asia
Can any of the company-specific risk be diversified away by investing in both ETFS Physical and Betashares Asia 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 ETFS Physical and Betashares Asia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ETFS Physical Gold and Betashares Asia Technology, you can compare the effects of market volatilities on ETFS Physical and Betashares Asia 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 ETFS Physical with a short position of Betashares Asia. Check out your portfolio center. Please also check ongoing floating volatility patterns of ETFS Physical and Betashares Asia.
Diversification Opportunities for ETFS Physical and Betashares Asia
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ETFS and Betashares is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding ETFS Physical Gold and Betashares Asia Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Betashares Asia Tech and ETFS Physical 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 ETFS Physical Gold are associated (or correlated) with Betashares Asia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Betashares Asia Tech has no effect on the direction of ETFS Physical i.e., ETFS Physical and Betashares Asia go up and down completely randomly.
Pair Corralation between ETFS Physical and Betashares Asia
Assuming the 90 days trading horizon ETFS Physical is expected to generate 1.49 times less return on investment than Betashares Asia. In addition to that, ETFS Physical is 1.05 times more volatile than Betashares Asia Technology. It trades about 0.17 of its total potential returns per unit of risk. Betashares Asia Technology is currently generating about 0.26 per unit of volatility. If you would invest 974.00 in Betashares Asia Technology on September 12, 2024 and sell it today you would earn a total of 47.00 from holding Betashares Asia Technology or generate 4.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ETFS Physical Gold vs. Betashares Asia Technology
Performance |
| Timeline |
| ETFS Physical Gold |
| Betashares Asia Tech |
ETFS Physical and Betashares Asia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ETFS Physical and Betashares Asia
The main advantage of trading using opposite ETFS Physical and Betashares Asia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ETFS Physical position performs unexpectedly, Betashares Asia 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 Asia will offset losses from the drop in Betashares Asia's long position.| ETFS Physical vs. Betashares Asia Technology | ETFS Physical vs. BetaShares Australia 200 | ETFS Physical vs. Australian High Interest | ETFS Physical vs. Vanguard Global Infrastructure |
| Betashares Asia vs. Betashares Australian Major | Betashares Asia vs. Betashares Wealth Builder | Betashares Asia vs. Betashares Australian Cash | Betashares Asia vs. Betashares Australian Bank |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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