Correlation Between Beta Shares and BetaShares Managed
Can any of the company-specific risk be diversified away by investing in both Beta Shares and BetaShares Managed 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 Beta Shares and BetaShares Managed into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Beta Shares SPASX and BetaShares Managed Risk, you can compare the effects of market volatilities on Beta Shares and BetaShares Managed 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 Beta Shares with a short position of BetaShares Managed. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beta Shares and BetaShares Managed.
Diversification Opportunities for Beta Shares and BetaShares Managed
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Beta and BetaShares is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Beta Shares SPASX and BetaShares Managed Risk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BetaShares Managed Risk and Beta Shares 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 Beta Shares SPASX are associated (or correlated) with BetaShares Managed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BetaShares Managed Risk has no effect on the direction of Beta Shares i.e., Beta Shares and BetaShares Managed go up and down completely randomly.
Pair Corralation between Beta Shares and BetaShares Managed
Assuming the 90 days trading horizon Beta Shares SPASX is expected to generate 1.53 times more return on investment than BetaShares Managed. However, Beta Shares is 1.53 times more volatile than BetaShares Managed Risk. It trades about 0.16 of its potential returns per unit of risk. BetaShares Managed Risk is currently generating about 0.13 per unit of risk. If you would invest 1,380 in Beta Shares SPASX on September 1, 2024 and sell it today you would earn a total of 318.00 from holding Beta Shares SPASX or generate 23.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.23% |
| Values | Daily Returns |
Beta Shares SPASX vs. BetaShares Managed Risk
Performance |
| Timeline |
| Beta Shares SPASX |
| BetaShares Managed Risk |
Beta Shares and BetaShares Managed Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Beta Shares and BetaShares Managed
The main advantage of trading using opposite Beta Shares and BetaShares Managed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beta Shares position performs unexpectedly, BetaShares Managed 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 Managed will offset losses from the drop in BetaShares Managed's long position.| Beta Shares vs. ETFS Morningstar Global | Beta Shares vs. BetaShares Geared Equity | Beta Shares vs. Beta Shares SPASX | Beta Shares vs. SPDR SP 500 |
| BetaShares Managed vs. BetaShares Global Banks | BetaShares Managed vs. Beta Shares SPASX | BetaShares Managed vs. Vanguard Australian Property | BetaShares Managed 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
Other Complementary Tools
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account |