Correlation Between BetaShares Crypto and BetaShares Global

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

Diversification Opportunities for BetaShares Crypto and BetaShares Global

0.86

Correlation Coefficient

BetaShares Crypto  BetaShares Global

Very poor diversification

The 3 months correlation between BetaShares and BetaShares is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding BetaShares Crypto Innovators and BetaShares Global Robotics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BetaShares Global and BetaShares Crypto 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 Crypto Innovators 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 has no effect on the direction of BetaShares Crypto i.e., BetaShares Crypto and BetaShares Global go up and down completely randomly.

Pair Corralation between BetaShares Crypto and BetaShares Global

Assuming the 90 days trading horizon BetaShares Crypto Innovators is expected to generate 4.21 times more return on investment than BetaShares Global. However, BetaShares Crypto is 4.21 times more volatile than BetaShares Global Robotics. It trades about 0.13 of its potential returns per unit of risk. BetaShares Global Robotics is currently generating about 0.15 per unit of risk. If you would invest  575.00  in BetaShares Crypto Innovators on October 20, 2024 and sell it today you would earn a total of  208.00  from holding BetaShares Crypto Innovators or generate 36.17% return on investment over 90 days.

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

BetaShares Crypto Innovators  vs.  BetaShares Global Robotics

BetaShares Crypto

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in BetaShares Crypto Innovators are ranked lower than 10 (%) 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.

BetaShares Global

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in BetaShares Global Robotics are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, BetaShares Global may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with BetaShares Crypto and BetaShares Global

The main advantage of trading using opposite BetaShares Crypto and BetaShares Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BetaShares Crypto 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 Crypto Innovators and BetaShares Global Robotics 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..