Correlation Between BetaShares Crypto and Global X

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

Diversification Opportunities for BetaShares Crypto and Global X

0.92

Correlation Coefficient

BetaShares Crypto  Global X

Almost no diversification

The 3 months correlation between BetaShares and Global is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding BetaShares Crypto Innovators and Global X Semiconductor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global X Semiconductor 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 Global X. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global X Semiconductor has no effect on the direction of BetaShares Crypto i.e., BetaShares Crypto and Global X go up and down completely randomly.

Pair Corralation between BetaShares Crypto and Global X

Assuming the 90 days trading horizon BetaShares Crypto Innovators is expected to under-perform the Global X. In addition to that, BetaShares Crypto is 2.51 times more volatile than Global X Semiconductor. It trades about -0.08 of its total potential returns per unit of risk. Global X Semiconductor is currently generating about -0.09 per unit of volatility. If you would invest  1,753  in Global X Semiconductor on December 29, 2024 and sell it today you would lose (190.00) from holding Global X Semiconductor or give up 10.84% of portfolio value over 90 days.

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

BetaShares Crypto Innovators  vs.  Global X Semiconductor

BetaShares Crypto

Risk-Adjusted Performance

Very Weak

Over the last 90 days BetaShares Crypto Innovators has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Etf's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the exchange-traded fund private investors.

Global X Semiconductor

Risk-Adjusted Performance

Very Weak

Over the last 90 days Global X Semiconductor has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Etf's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the exchange-traded fund private investors.

Pair Trading with BetaShares Crypto and Global X

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

The idea behind BetaShares Crypto Innovators and Global X Semiconductor 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.