Correlation Between SPDR SP and BetaShares Geared
Can any of the company-specific risk be diversified away by investing in both SPDR SP and BetaShares Geared 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 Geared 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 Geared Equity, you can compare the effects of market volatilities on SPDR SP and BetaShares Geared 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 Geared. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR SP and BetaShares Geared.
Diversification Opportunities for SPDR SP and BetaShares Geared
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between SPDR and BetaShares is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding SPDR SP World and BetaShares Geared Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BetaShares Geared Equity 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 Geared. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BetaShares Geared Equity has no effect on the direction of SPDR SP i.e., SPDR SP and BetaShares Geared go up and down completely randomly.
Pair Corralation between SPDR SP and BetaShares Geared
Assuming the 90 days trading horizon SPDR SP World is expected to generate 0.53 times more return on investment than BetaShares Geared. However, SPDR SP World is 1.88 times less risky than BetaShares Geared. It trades about 0.41 of its potential returns per unit of risk. BetaShares Geared Equity is currently generating about 0.22 per unit of risk. If you would invest 4,723 in SPDR SP World on September 19, 2024 and sell it today you would earn a total of 206.00 from holding SPDR SP World or generate 4.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPDR SP World vs. BetaShares Geared Equity
Performance |
| Timeline |
| SPDR SP World |
| BetaShares Geared Equity |
SPDR SP and BetaShares Geared Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR SP and BetaShares Geared
The main advantage of trading using opposite SPDR SP and BetaShares Geared positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR SP position performs unexpectedly, BetaShares Geared 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 Geared will offset losses from the drop in BetaShares Geared's long position.| SPDR SP vs. BetaShares Geared Equity | SPDR SP vs. VanEck Vectors Australian | SPDR SP vs. Vanguard Total Market | SPDR SP vs. VanEck Morningstar Wide |
| BetaShares Geared vs. Betashares Asia Technology | BetaShares Geared vs. CD Private Equity | BetaShares Geared vs. BetaShares Australia 200 | BetaShares Geared vs. Australian High Interest |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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