Correlation Between Beta Shares and IShares Asia
Can any of the company-specific risk be diversified away by investing in both Beta Shares and IShares 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 Beta Shares and IShares Asia 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 iShares Asia 50, you can compare the effects of market volatilities on Beta Shares and IShares 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 Beta Shares with a short position of IShares Asia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beta Shares and IShares Asia.
Diversification Opportunities for Beta Shares and IShares Asia
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Beta and IShares is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Beta Shares SPASX and iShares Asia 50 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Asia 50 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 IShares Asia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Asia 50 has no effect on the direction of Beta Shares i.e., Beta Shares and IShares Asia go up and down completely randomly.
Pair Corralation between Beta Shares and IShares Asia
Assuming the 90 days trading horizon Beta Shares SPASX is expected to under-perform the IShares Asia. In addition to that, Beta Shares is 1.06 times more volatile than iShares Asia 50. It trades about 0.0 of its total potential returns per unit of risk. iShares Asia 50 is currently generating about 0.06 per unit of volatility. If you would invest 8,242 in iShares Asia 50 on September 19, 2024 and sell it today you would earn a total of 2,749 from holding iShares Asia 50 or generate 33.35% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Beta Shares SPASX vs. iShares Asia 50
Performance |
Timeline |
Beta Shares SPASX |
iShares Asia 50 |
Beta Shares and IShares Asia Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Beta Shares and IShares Asia
The main advantage of trading using opposite Beta Shares and IShares Asia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beta Shares position performs unexpectedly, IShares 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 IShares Asia will offset losses from the drop in IShares Asia's long position.Beta Shares vs. iSharesGlobal 100 | Beta Shares vs. iShares Core SP | Beta Shares vs. SPDR SP 500 | Beta Shares vs. Vanguard Total Market |
IShares Asia vs. ETFS Morningstar Global | IShares Asia vs. BetaShares Geared Equity | IShares Asia vs. VanEck Vectors Australian | IShares 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 Transaction History module to view history of all your transactions and understand their impact on performance.
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