Correlation Between Betashares Equities and Betashares Global

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

By analyzing existing cross correlation between Betashares Equities Strong and Betashares Global Shares, you can compare the effects of market volatilities on Betashares Equities 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 Betashares Equities with a short position of Betashares Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Betashares Equities and Betashares Global.

Diversification Opportunities for Betashares Equities and Betashares Global

-0.77

Correlation Coefficient

Betashares Equities  Betashares Global

Pay attention - limited upside

The 3 months correlation between Betashares and Betashares is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Betashares Equities Strong and Betashares Global Shares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Betashares Global Shares and Betashares Equities 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 Equities Strong 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 Shares has no effect on the direction of Betashares Equities i.e., Betashares Equities and Betashares Global go up and down completely randomly.

Pair Corralation between Betashares Equities and Betashares Global

Assuming the 90 days trading horizon Betashares Equities Strong is expected to generate 2.66 times more return on investment than Betashares Global. However, Betashares Equities is 2.66 times more volatile than Betashares Global Shares. It trades about 0.08 of its potential returns per unit of risk. Betashares Global Shares is currently generating about -0.01 per unit of risk. If you would invest  418.00  in Betashares Equities Strong on December 1, 2024 and sell it today you would earn a total of  38.00  from holding Betashares Equities Strong or generate 9.09% return on investment over 90 days.

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

Betashares Equities Strong  vs.  Betashares Global Shares

Betashares Equities

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Betashares Equities Strong are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Betashares Equities may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Betashares Global Shares

Risk-Adjusted Performance

Very Weak

Over the last 90 days Betashares Global Shares has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Betashares Global 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 Equities and Betashares Global

The main advantage of trading using opposite Betashares Equities and Betashares Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Betashares Equities 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.

The idea behind Betashares Equities Strong and Betashares Global Shares 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.