Correlation Between BetaShares Legg and BetaShares Geared
Can any of the company-specific risk be diversified away by investing in both BetaShares Legg and BetaShares Geared 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 Legg and BetaShares Geared into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BetaShares Legg Mason and BetaShares Geared Australian, you can compare the effects of market volatilities on BetaShares Legg and BetaShares Geared 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 Legg with a short position of BetaShares Geared. Check out your portfolio center. Please also check ongoing floating volatility patterns of BetaShares Legg and BetaShares Geared.
Diversification Opportunities for BetaShares Legg and BetaShares Geared
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between BetaShares and BetaShares is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding BetaShares Legg Mason and BetaShares Geared Australian in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BetaShares Geared and BetaShares Legg 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 Legg Mason are associated (or correlated) with BetaShares Geared. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BetaShares Geared has no effect on the direction of BetaShares Legg i.e., BetaShares Legg and BetaShares Geared go up and down completely randomly.
Pair Corralation between BetaShares Legg and BetaShares Geared
Assuming the 90 days trading horizon BetaShares Legg Mason is expected to generate 55.02 times more return on investment than BetaShares Geared. However, BetaShares Legg is 55.02 times more volatile than BetaShares Geared Australian. It trades about 0.08 of its potential returns per unit of risk. BetaShares Geared Australian is currently generating about 0.05 per unit of risk. If you would invest 797.00 in BetaShares Legg Mason on August 29, 2024 and sell it today you would earn a total of 118.00 from holding BetaShares Legg Mason or generate 14.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.2% |
| Values | Daily Returns |
BetaShares Legg Mason vs. BetaShares Geared Australian
Performance |
| Timeline |
| BetaShares Legg Mason |
| BetaShares Geared |
BetaShares Legg and BetaShares Geared Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BetaShares Legg and BetaShares Geared
The main advantage of trading using opposite BetaShares Legg and BetaShares Geared positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BetaShares Legg position performs unexpectedly, BetaShares Geared 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 Geared will offset losses from the drop in BetaShares Geared's long position.| BetaShares Legg vs. BetaShares Geared Australian | BetaShares Legg vs. BetaShares Global Robotics | BetaShares Legg vs. iShares China LargeCap | BetaShares Legg vs. Russell Australian Government |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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