Correlation Between ISharesGlobal 100 and Beta Shares
Can any of the company-specific risk be diversified away by investing in both ISharesGlobal 100 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 ISharesGlobal 100 and Beta Shares into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iSharesGlobal 100 and Beta Shares SPASX, you can compare the effects of market volatilities on ISharesGlobal 100 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 ISharesGlobal 100 with a short position of Beta Shares. Check out your portfolio center. Please also check ongoing floating volatility patterns of ISharesGlobal 100 and Beta Shares.
Diversification Opportunities for ISharesGlobal 100 and Beta Shares
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ISharesGlobal and Beta is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding iSharesGlobal 100 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 ISharesGlobal 100 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 iSharesGlobal 100 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 ISharesGlobal 100 i.e., ISharesGlobal 100 and Beta Shares go up and down completely randomly.
Pair Corralation between ISharesGlobal 100 and Beta Shares
Assuming the 90 days trading horizon iSharesGlobal 100 is expected to generate 0.58 times more return on investment than Beta Shares. However, iSharesGlobal 100 is 1.72 times less risky than Beta Shares. It trades about 0.52 of its potential returns per unit of risk. Beta Shares SPASX is currently generating about -0.05 per unit of risk. If you would invest 15,220 in iSharesGlobal 100 on September 19, 2024 and sell it today you would earn a total of 1,016 from holding iSharesGlobal 100 or generate 6.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
iSharesGlobal 100 vs. Beta Shares SPASX
Performance |
| Timeline |
| iSharesGlobal 100 |
| Beta Shares SPASX |
ISharesGlobal 100 and Beta Shares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ISharesGlobal 100 and Beta Shares
The main advantage of trading using opposite ISharesGlobal 100 and Beta Shares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ISharesGlobal 100 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.| ISharesGlobal 100 vs. BetaShares Geared Equity | ISharesGlobal 100 vs. VanEck Vectors Australian | ISharesGlobal 100 vs. Vanguard Total Market | ISharesGlobal 100 vs. VanEck Morningstar Wide |
| Beta Shares vs. iSharesGlobal 100 | Beta Shares vs. iShares Core SP | Beta Shares vs. SPDR SP 500 | Beta Shares vs. Vanguard Total Market |
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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