Correlation Between SPDR SPASX and BetaShares Global
Can any of the company-specific risk be diversified away by investing in both SPDR SPASX and BetaShares Global 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 SPDR SPASX and BetaShares Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPDR SPASX 200 and BetaShares Global Government, you can compare the effects of market volatilities on SPDR SPASX and BetaShares Global 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 SPDR SPASX with a short position of BetaShares Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR SPASX and BetaShares Global.
Diversification Opportunities for SPDR SPASX and BetaShares Global
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between SPDR and BetaShares is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding SPDR SPASX 200 and BetaShares Global Government in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BetaShares Global and SPDR SPASX 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 SPDR SPASX 200 are associated (or correlated) with BetaShares Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BetaShares Global has no effect on the direction of SPDR SPASX i.e., SPDR SPASX and BetaShares Global go up and down completely randomly.
Pair Corralation between SPDR SPASX and BetaShares Global
Assuming the 90 days trading horizon SPDR SPASX 200 is expected to generate 0.66 times more return on investment than BetaShares Global. However, SPDR SPASX 200 is 1.51 times less risky than BetaShares Global. It trades about 0.31 of its potential returns per unit of risk. BetaShares Global Government is currently generating about 0.05 per unit of risk. If you would invest 7,356 in SPDR SPASX 200 on September 1, 2024 and sell it today you would earn a total of 280.00 from holding SPDR SPASX 200 or generate 3.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
SPDR SPASX 200 vs. BetaShares Global Government
Performance |
| Timeline |
| SPDR SPASX 200 |
| BetaShares Global |
SPDR SPASX and BetaShares Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR SPASX and BetaShares Global
The main advantage of trading using opposite SPDR SPASX and BetaShares Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR SPASX position performs unexpectedly, BetaShares Global 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 Global will offset losses from the drop in BetaShares Global's long position.| SPDR SPASX vs. BetaShares Global Government | SPDR SPASX vs. BetaShares Geared Australian | SPDR SPASX vs. BetaShares Australian Government | SPDR SPASX vs. BetaShares Global Robotics |
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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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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