Correlation Between BetaShares Managed and Beta Shares
Can any of the company-specific risk be diversified away by investing in both BetaShares Managed and Beta Shares 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 Beta Shares 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 Beta Shares SPASX, you can compare the effects of market volatilities on BetaShares Managed and Beta Shares 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 Beta Shares. Check out your portfolio center. Please also check ongoing floating volatility patterns of BetaShares Managed and Beta Shares.
Diversification Opportunities for BetaShares Managed and Beta Shares
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between BetaShares and Beta is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding BetaShares Managed Risk and Beta Shares SPASX in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beta Shares SPASX 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 Beta Shares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beta Shares SPASX has no effect on the direction of BetaShares Managed i.e., BetaShares Managed and Beta Shares go up and down completely randomly.
Pair Corralation between BetaShares Managed and Beta Shares
Assuming the 90 days trading horizon BetaShares Managed is expected to generate 1.93 times less return on investment than Beta Shares. But when comparing it to its historical volatility, BetaShares Managed Risk is 1.4 times less risky than Beta Shares. It trades about 0.19 of its potential returns per unit of risk. Beta Shares SPASX is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 1,593 in Beta Shares SPASX on September 1, 2024 and sell it today you would earn a total of 105.00 from holding Beta Shares SPASX or generate 6.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
BetaShares Managed Risk vs. Beta Shares SPASX
Performance |
| Timeline |
| BetaShares Managed Risk |
| Beta Shares SPASX |
BetaShares Managed and Beta Shares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BetaShares Managed and Beta Shares
The main advantage of trading using opposite BetaShares Managed and Beta Shares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BetaShares Managed position performs unexpectedly, Beta Shares 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 Beta Shares will offset losses from the drop in Beta Shares' long position.| BetaShares Managed vs. BetaShares Global Banks | BetaShares Managed vs. Beta Shares SPASX | BetaShares Managed vs. Vanguard Australian Property | BetaShares Managed vs. Vanguard Total Market |
| Beta Shares vs. ETFS Morningstar Global | Beta Shares vs. BetaShares Geared Equity | Beta Shares vs. Beta Shares SPASX | Beta Shares vs. SPDR SP 500 |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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