Correlation Between VanEck Global and Betashares Asia
Can any of the company-specific risk be diversified away by investing in both VanEck Global 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 VanEck Global and Betashares Asia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VanEck Global Listed and Betashares Asia Technology, you can compare the effects of market volatilities on VanEck Global 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 VanEck Global with a short position of Betashares Asia. Check out your portfolio center. Please also check ongoing floating volatility patterns of VanEck Global and Betashares Asia.
Diversification Opportunities for VanEck Global and Betashares Asia
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between VanEck and Betashares is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding VanEck Global Listed 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 VanEck Global 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 VanEck Global Listed 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 VanEck Global i.e., VanEck Global and Betashares Asia go up and down completely randomly.
Pair Corralation between VanEck Global and Betashares Asia
Assuming the 90 days trading horizon VanEck Global is expected to generate 1.06 times less return on investment than Betashares Asia. But when comparing it to its historical volatility, VanEck Global Listed is 1.27 times less risky than Betashares Asia. It trades about 0.38 of its potential returns per unit of risk. Betashares Asia Technology is currently generating about 0.32 of returns per unit of risk over similar time horizon. If you would invest 957.00 in Betashares Asia Technology on September 15, 2024 and sell it today you would earn a total of 59.00 from holding Betashares Asia Technology or generate 6.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
VanEck Global Listed vs. Betashares Asia Technology
Performance |
| Timeline |
| VanEck Global Listed |
| Betashares Asia Tech |
VanEck Global and Betashares Asia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VanEck Global and Betashares Asia
The main advantage of trading using opposite VanEck Global and Betashares Asia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VanEck Global 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.| VanEck Global vs. Betashares Asia Technology | VanEck Global vs. BetaShares Australia 200 | VanEck Global vs. Australian High Interest | VanEck Global vs. Vanguard Global Infrastructure |
| Betashares Asia vs. ETFS Morningstar Global | Betashares Asia vs. BetaShares Geared Equity | Betashares Asia vs. VanEck Vectors Australian | Betashares Asia vs. SPDR SPASX 200 |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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