Correlation Between BetaShares Australia and ETFS ROBO

Can any of the company-specific risk be diversified away by investing in both BetaShares Australia and ETFS ROBO 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 Australia and ETFS ROBO into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between BetaShares Australia 200 and ETFS ROBO Global, you can compare the effects of market volatilities on BetaShares Australia and ETFS ROBO 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 Australia with a short position of ETFS ROBO. Check out your portfolio center. Please also check ongoing floating volatility patterns of BetaShares Australia and ETFS ROBO.

Diversification Opportunities for BetaShares Australia and ETFS ROBO

0.56

Correlation Coefficient

BetaShares Australia  ETFS ROBO

Very weak diversification

The 3 months correlation between BetaShares and ETFS is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding BetaShares Australia 200 and ETFS ROBO Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ETFS ROBO Global and BetaShares Australia 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 Australia 200 are associated (or correlated) with ETFS ROBO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ETFS ROBO Global has no effect on the direction of BetaShares Australia i.e., BetaShares Australia and ETFS ROBO go up and down completely randomly.

Pair Corralation between BetaShares Australia and ETFS ROBO

Assuming the 90 days trading horizon BetaShares Australia 200 is expected to under-perform the ETFS ROBO. But the etf apears to be less risky and, when comparing its historical volatility, BetaShares Australia 200 is 1.57 times less risky than ETFS ROBO. The etf trades about -0.06 of its potential returns per unit of risk. The ETFS ROBO Global is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  7,724  in ETFS ROBO Global on December 1, 2024 and sell it today you would earn a total of  256.00  from holding ETFS ROBO Global or generate 3.31% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

BetaShares Australia 200  vs.  ETFS ROBO Global

BetaShares Australia 200

Risk-Adjusted Performance

Very Weak

Over the last 90 days BetaShares Australia 200 has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, BetaShares Australia is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

ETFS ROBO Global

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in ETFS ROBO Global are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, ETFS ROBO is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with BetaShares Australia and ETFS ROBO

The main advantage of trading using opposite BetaShares Australia and ETFS ROBO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BetaShares Australia position performs unexpectedly, ETFS ROBO 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 ETFS ROBO will offset losses from the drop in ETFS ROBO's long position.

The idea behind BetaShares Australia 200 and ETFS ROBO Global pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.