Correlation Between BetaShares Managed and BetaShares Global
Can any of the company-specific risk be diversified away by investing in both BetaShares Managed 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 BetaShares Managed and BetaShares Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BetaShares Managed Risk and BetaShares Global Banks, you can compare the effects of market volatilities on BetaShares Managed 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 BetaShares Managed with a short position of BetaShares Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of BetaShares Managed and BetaShares Global.
Diversification Opportunities for BetaShares Managed and BetaShares Global
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between BetaShares and BetaShares is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding BetaShares Managed Risk and BetaShares Global Banks in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BetaShares Global Banks and BetaShares Managed 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 Managed Risk 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 Banks has no effect on the direction of BetaShares Managed i.e., BetaShares Managed and BetaShares Global go up and down completely randomly.
Pair Corralation between BetaShares Managed and BetaShares Global
Assuming the 90 days trading horizon BetaShares Managed is expected to generate 1.23 times less return on investment than BetaShares Global. But when comparing it to its historical volatility, BetaShares Managed Risk is 1.51 times less risky than BetaShares Global. It trades about 0.11 of its potential returns per unit of risk. BetaShares Global Banks is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 571.00 in BetaShares Global Banks on September 3, 2024 and sell it today you would earn a total of 295.00 from holding BetaShares Global Banks or generate 51.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
BetaShares Managed Risk vs. BetaShares Global Banks
Performance |
| Timeline |
| BetaShares Managed Risk |
| BetaShares Global Banks |
BetaShares Managed and BetaShares Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BetaShares Managed and BetaShares Global
The main advantage of trading using opposite BetaShares Managed and BetaShares Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BetaShares Managed 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.| BetaShares Managed vs. SPDR SP 500 | BetaShares Managed vs. iShares Core SP | BetaShares Managed vs. iShares Core SP | BetaShares Managed vs. VanEck Vectors MSCI |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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