Correlation Between Betashares Global and Betashares Australian
Can any of the company-specific risk be diversified away by investing in both Betashares Global and Betashares Australian 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 Global and Betashares Australian into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Betashares Global Shares and Betashares Australian Major, you can compare the effects of market volatilities on Betashares Global and Betashares Australian 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 Global with a short position of Betashares Australian. Check out your portfolio center. Please also check ongoing floating volatility patterns of Betashares Global and Betashares Australian.
Diversification Opportunities for Betashares Global and Betashares Australian
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Betashares and Betashares is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Betashares Global Shares and Betashares Australian Major in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Betashares Australian and Betashares 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 Betashares Global Shares are associated (or correlated) with Betashares Australian. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Betashares Australian has no effect on the direction of Betashares Global i.e., Betashares Global and Betashares Australian go up and down completely randomly.
Pair Corralation between Betashares Global and Betashares Australian
Assuming the 90 days trading horizon Betashares Global Shares is expected to generate 4.69 times more return on investment than Betashares Australian. However, Betashares Global is 4.69 times more volatile than Betashares Australian Major. It trades about 0.1 of its potential returns per unit of risk. Betashares Australian Major is currently generating about 0.17 per unit of risk. If you would invest 5,126 in Betashares Global Shares on September 2, 2024 and sell it today you would earn a total of 1,625 from holding Betashares Global Shares or generate 31.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 40.11% |
| Values | Daily Returns |
Betashares Global Shares vs. Betashares Australian Major
Performance |
| Timeline |
| Betashares Global Shares |
| Betashares Australian |
Betashares Global and Betashares Australian Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Betashares Global and Betashares Australian
The main advantage of trading using opposite Betashares Global and Betashares Australian positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Betashares Global position performs unexpectedly, Betashares Australian 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 Australian will offset losses from the drop in Betashares Australian's long position.| Betashares Global vs. Betashares Australian Major | Betashares Global vs. Betashares Wealth Builder | Betashares Global vs. Betashares Australian Cash | Betashares Global 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
Other Complementary Tools
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings |