Correlation Between BetaShares Australian and VanEck Global

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

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

Diversification Opportunities for BetaShares Australian and VanEck Global

-0.28

Correlation Coefficient

BetaShares Australian  VanEck Global

Very good diversification

The 3 months correlation between BetaShares and VanEck is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding BetaShares Australian Equities and VanEck Global Listed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VanEck Global Listed 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 EquitiesBear are associated (or correlated) with VanEck Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VanEck Global Listed has no effect on the direction of BetaShares Australian i.e., BetaShares Australian and VanEck Global go up and down completely randomly.

Pair Corralation between BetaShares Australian and VanEck Global

Assuming the 90 days trading horizon BetaShares Australian is expected to generate 25.15 times less return on investment than VanEck Global. But when comparing it to its historical volatility, BetaShares Australian EquitiesBear is 1.32 times less risky than VanEck Global. It trades about 0.01 of its potential returns per unit of risk. VanEck Global Listed is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest  2,257  in VanEck Global Listed on October 7, 2024 and sell it today you would earn a total of  326.00  from holding VanEck Global Listed or generate 14.44% return on investment over 90 days.

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

BetaShares Australian Equities  vs.  VanEck Global Listed

BetaShares Australian

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BetaShares Australian EquitiesBear 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.

VanEck Global Listed

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in VanEck Global Listed are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, VanEck Global unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with BetaShares Australian and VanEck Global

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

The idea behind BetaShares Australian EquitiesBear and VanEck Global Listed 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.