Correlation Between SPDR SP and BetaShares Global
Can any of the company-specific risk be diversified away by investing in both SPDR SP 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 SP 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 SP World and BetaShares Global Government, you can compare the effects of market volatilities on SPDR SP 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 SP with a short position of BetaShares Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR SP and BetaShares Global.
Diversification Opportunities for SPDR SP and BetaShares Global
-0.87 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between SPDR and BetaShares is -0.87. Overlapping area represents the amount of risk that can be diversified away by holding SPDR SP World 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 SP 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 SP World 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 SP i.e., SPDR SP and BetaShares Global go up and down completely randomly.
Pair Corralation between SPDR SP and BetaShares Global
Assuming the 90 days trading horizon SPDR SP World is expected to generate 0.8 times more return on investment than BetaShares Global. However, SPDR SP World is 1.25 times less risky than BetaShares Global. It trades about 0.22 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 4,640 in SPDR SP World on September 1, 2024 and sell it today you would earn a total of 151.00 from holding SPDR SP World or generate 3.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
SPDR SP World vs. BetaShares Global Government
Performance |
| Timeline |
| SPDR SP World |
| BetaShares Global |
SPDR SP and BetaShares Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR SP and BetaShares Global
The main advantage of trading using opposite SPDR SP and BetaShares Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR SP 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 SP vs. SPDR SPASX 200 | SPDR SP vs. SPDR SPASX 50 | SPDR SP vs. SPDR MSCI World | SPDR SP vs. SPDR Dow Jones |
| BetaShares Global vs. Champion Iron | BetaShares Global vs. Australian Dairy Farms | BetaShares Global vs. Perpetual Credit Income | BetaShares Global 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 Global Correlations module to find global opportunities by holding instruments from different markets.
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