Correlation Between VanEck Global and Betashares Asia

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

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

Diversification Opportunities for VanEck Global and Betashares Asia

-0.62

Correlation Coefficient

VanEck Global  Betashares Asia

Excellent diversification

The 3 months correlation between VanEck and Betashares is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding VanEck Global Clean and Betashares Asia Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Betashares Asia Tech and VanEck Global 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 VanEck Global Clean are associated (or correlated) with Betashares Asia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Betashares Asia Tech has no effect on the direction of VanEck Global i.e., VanEck Global and Betashares Asia go up and down completely randomly.

Pair Corralation between VanEck Global and Betashares Asia

Assuming the 90 days trading horizon VanEck Global Clean is expected to under-perform the Betashares Asia. But the etf apears to be less risky and, when comparing its historical volatility, VanEck Global Clean is 1.1 times less risky than Betashares Asia. The etf trades about -0.05 of its potential returns per unit of risk. The Betashares Asia Technology is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest  947.00  in Betashares Asia Technology on December 2, 2024 and sell it today you would earn a total of  165.00  from holding Betashares Asia Technology or generate 17.42% return on investment over 90 days.

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

VanEck Global Clean  vs.  Betashares Asia Technology

VanEck Global Clean

Risk-Adjusted Performance

Very Weak

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

Betashares Asia Tech

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Betashares Asia Technology are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Betashares Asia unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with VanEck Global and Betashares Asia

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

The idea behind VanEck Global Clean and Betashares Asia Technology 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.