Correlation Between Global X and Betashares Asia
Can any of the company-specific risk be diversified away by investing in both Global X and Betashares 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 Global X and Betashares Asia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global X Treasury and Betashares Asia Technology, you can compare the effects of market volatilities on Global X and Betashares 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 Global X with a short position of Betashares Asia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global X and Betashares Asia.
Diversification Opportunities for Global X and Betashares Asia
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Global and Betashares is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Global X Treasury and Betashares Asia Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Betashares Asia Tech 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 Treasury are associated (or correlated) with Betashares Asia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Betashares Asia Tech has no effect on the direction of Global X i.e., Global X and Betashares Asia go up and down completely randomly.
Pair Corralation between Global X and Betashares Asia
Assuming the 90 days trading horizon Global X is expected to generate 6.56 times less return on investment than Betashares Asia. But when comparing it to its historical volatility, Global X Treasury is 3.53 times less risky than Betashares Asia. It trades about 0.14 of its potential returns per unit of risk. Betashares Asia Technology is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 974.00 in Betashares Asia Technology on September 12, 2024 and sell it today you would earn a total of 47.00 from holding Betashares Asia Technology or generate 4.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Global X Treasury vs. Betashares Asia Technology
Performance |
| Timeline |
| Global X Treasury |
| Betashares Asia Tech |
Global X and Betashares Asia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global X and Betashares Asia
The main advantage of trading using opposite Global X and Betashares Asia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global X position performs unexpectedly, Betashares 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 Betashares Asia will offset losses from the drop in Betashares Asia's long position.| Global X vs. Betashares Asia Technology | Global X vs. BetaShares Australia 200 | Global X vs. Australian High Interest | Global X vs. Vanguard Global Infrastructure |
| Betashares Asia vs. Betashares Australian Major | Betashares Asia vs. Betashares Wealth Builder | Betashares Asia vs. Betashares Australian Cash | Betashares Asia vs. Betashares Australian Bank |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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