Correlation Between BetaShares Australian and ETFS ROBO

Can any of the company-specific risk be diversified away by investing in both BetaShares Australian 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 Australian 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 Australian Government and ETFS ROBO Global, you can compare the effects of market volatilities on BetaShares Australian 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 Australian with a short position of ETFS ROBO. Check out your portfolio center. Please also check ongoing floating volatility patterns of BetaShares Australian and ETFS ROBO.

Diversification Opportunities for BetaShares Australian and ETFS ROBO

-0.81

Correlation Coefficient

BetaShares Australian  ETFS ROBO

Pay attention - limited upside

The 3 months correlation between BetaShares and ETFS is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding BetaShares Australian Governme 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 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 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 Australian i.e., BetaShares Australian and ETFS ROBO go up and down completely randomly.

Pair Corralation between BetaShares Australian and ETFS ROBO

Assuming the 90 days trading horizon BetaShares Australian Government is expected to under-perform the ETFS ROBO. But the etf apears to be less risky and, when comparing its historical volatility, BetaShares Australian Government is 2.78 times less risky than ETFS ROBO. The etf trades about -0.05 of its potential returns per unit of risk. The ETFS ROBO Global is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  7,118  in ETFS ROBO Global on September 3, 2024 and sell it today you would earn a total of  563.00  from holding ETFS ROBO Global or generate 7.91% return on investment over 90 days.

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

BetaShares Australian Governme  vs.  ETFS ROBO Global

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.

ETFS ROBO Global

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in ETFS ROBO Global are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, ETFS ROBO may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with BetaShares Australian and ETFS ROBO

The main advantage of trading using opposite BetaShares Australian and ETFS ROBO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BetaShares Australian 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 Australian Government 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.