Correlation Between BetaShares Australian and BetaShares Crypto

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

By analyzing existing cross correlation between BetaShares Australian Government and BetaShares Crypto Innovators, you can compare the effects of market volatilities on BetaShares Australian and BetaShares Crypto 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 Australian with a short position of BetaShares Crypto. Check out your portfolio center. Please also check ongoing floating volatility patterns of BetaShares Australian and BetaShares Crypto.

Diversification Opportunities for BetaShares Australian and BetaShares Crypto

-0.49

Correlation Coefficient

BetaShares Australian  BetaShares Crypto

Very good diversification

The 3 months correlation between BetaShares and BetaShares is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding BetaShares Australian Governme and BetaShares Crypto Innovators in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BetaShares Crypto and BetaShares Australian 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 Australian Government are associated (or correlated) with BetaShares Crypto. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BetaShares Crypto has no effect on the direction of BetaShares Australian i.e., BetaShares Australian and BetaShares Crypto go up and down completely randomly.

Pair Corralation between BetaShares Australian and BetaShares Crypto

Assuming the 90 days trading horizon BetaShares Australian Government is expected to under-perform the BetaShares Crypto. But the etf apears to be less risky and, when comparing its historical volatility, BetaShares Australian Government is 11.92 times less risky than BetaShares Crypto. The etf trades about -0.06 of its potential returns per unit of risk. The BetaShares Crypto Innovators is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest  444.00  in BetaShares Crypto Innovators on September 13, 2024 and sell it today you would earn a total of  344.00  from holding BetaShares Crypto Innovators or generate 77.48% return on investment over 90 days.

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

BetaShares Australian Governme  vs.  BetaShares Crypto Innovators

BetaShares Australian

Risk-Adjusted Performance

0 of 100

Very Weak

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

BetaShares Crypto

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in BetaShares Crypto Innovators are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, BetaShares Crypto unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with BetaShares Australian and BetaShares Crypto

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

The idea behind BetaShares Australian Government and BetaShares Crypto Innovators 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.