Correlation Between Global X and Beta Shares
Can any of the company-specific risk be diversified away by investing in both Global X and Beta Shares 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 Global X and Beta Shares into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global X Hydrogen and Beta Shares SPASX, you can compare the effects of market volatilities on Global X and Beta Shares 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 Global X with a short position of Beta Shares. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global X and Beta Shares.
Diversification Opportunities for Global X and Beta Shares
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Global and Beta is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Global X Hydrogen and Beta Shares SPASX in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beta Shares SPASX and Global X 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 Global X Hydrogen are associated (or correlated) with Beta Shares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beta Shares SPASX has no effect on the direction of Global X i.e., Global X and Beta Shares go up and down completely randomly.
Pair Corralation between Global X and Beta Shares
Assuming the 90 days trading horizon Global X Hydrogen is expected to generate 2.81 times more return on investment than Beta Shares. However, Global X is 2.81 times more volatile than Beta Shares SPASX. It trades about 0.24 of its potential returns per unit of risk. Beta Shares SPASX is currently generating about 0.26 per unit of risk. If you would invest 428.00 in Global X Hydrogen on September 1, 2024 and sell it today you would earn a total of 72.00 from holding Global X Hydrogen or generate 16.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global X Hydrogen vs. Beta Shares SPASX
Performance |
| Timeline |
| Global X Hydrogen |
| Beta Shares SPASX |
Global X and Beta Shares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global X and Beta Shares
The main advantage of trading using opposite Global X and Beta Shares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global X position performs unexpectedly, Beta Shares 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 Shares will offset losses from the drop in Beta Shares' long position.| Global X vs. Global X Physical | Global X vs. Global X Treasury | Global X vs. Global X Physical | Global X vs. Global X Bloomberg |
| Beta Shares vs. ETFS Morningstar Global | Beta Shares vs. BetaShares Geared Equity | Beta Shares vs. Beta Shares SPASX | Beta Shares vs. SPDR SP 500 |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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