Correlation Between Global X and BetaShares Climate
Can any of the company-specific risk be diversified away by investing in both Global X and BetaShares Climate 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 BetaShares Climate into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global X Semiconductor and BetaShares Climate Change, you can compare the effects of market volatilities on Global X and BetaShares Climate 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 BetaShares Climate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global X and BetaShares Climate.
Diversification Opportunities for Global X and BetaShares Climate
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Global and BetaShares is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Global X Semiconductor and BetaShares Climate Change in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BetaShares Climate Change 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 Semiconductor are associated (or correlated) with BetaShares Climate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BetaShares Climate Change has no effect on the direction of Global X i.e., Global X and BetaShares Climate go up and down completely randomly.
Pair Corralation between Global X and BetaShares Climate
Assuming the 90 days trading horizon Global X Semiconductor is expected to under-perform the BetaShares Climate. In addition to that, Global X is 1.03 times more volatile than BetaShares Climate Change. It trades about -0.1 of its total potential returns per unit of risk. BetaShares Climate Change is currently generating about -0.04 per unit of volatility. If you would invest 904.00 in BetaShares Climate Change on September 1, 2024 and sell it today you would lose (10.00) from holding BetaShares Climate Change or give up 1.11% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Global X Semiconductor vs. BetaShares Climate Change
Performance |
| Timeline |
| Global X Semiconductor |
| BetaShares Climate Change |
Global X and BetaShares Climate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global X and BetaShares Climate
The main advantage of trading using opposite Global X and BetaShares Climate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global X position performs unexpectedly, BetaShares Climate 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 Climate will offset losses from the drop in BetaShares Climate's long position.| Global X vs. Champion Iron | Global X vs. Australian Dairy Farms | Global X vs. Perpetual Credit Income | Global X vs. Greentech Metals |
| BetaShares Climate vs. Champion Iron | BetaShares Climate vs. Australian Dairy Farms | BetaShares Climate vs. Perpetual Credit Income | BetaShares Climate vs. Greentech Metals |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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