Correlation Between ISharesGlobal 100 and BetaShares Global

Can any of the company-specific risk be diversified away by investing in both ISharesGlobal 100 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 ISharesGlobal 100 and BetaShares Global into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between iSharesGlobal 100 and BetaShares Global Sustainability, you can compare the effects of market volatilities on ISharesGlobal 100 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 ISharesGlobal 100 with a short position of BetaShares Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of ISharesGlobal 100 and BetaShares Global.

Diversification Opportunities for ISharesGlobal 100 and BetaShares Global

0.95

Correlation Coefficient

ISharesGlobal 100  BetaShares Global

Almost no diversification

The 3 months correlation between ISharesGlobal and BetaShares is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding iSharesGlobal 100 and BetaShares Global Sustainabili in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BetaShares Global and ISharesGlobal 100 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 iSharesGlobal 100 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 ISharesGlobal 100 i.e., ISharesGlobal 100 and BetaShares Global go up and down completely randomly.

Pair Corralation between ISharesGlobal 100 and BetaShares Global

Assuming the 90 days trading horizon iSharesGlobal 100 is expected to under-perform the BetaShares Global. In addition to that, ISharesGlobal 100 is 1.07 times more volatile than BetaShares Global Sustainability. It trades about -0.11 of its total potential returns per unit of risk. BetaShares Global Sustainability is currently generating about -0.09 per unit of volatility. If you would invest  1,637  in BetaShares Global Sustainability on December 26, 2024 and sell it today you would lose (61.00) from holding BetaShares Global Sustainability or give up 3.73% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	98.39%
Values	Daily Returns

iSharesGlobal 100  vs.  BetaShares Global Sustainabili

iSharesGlobal 100

Risk-Adjusted Performance

Very Weak

Over the last 90 days iSharesGlobal 100 has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, ISharesGlobal 100 is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

BetaShares Global

Risk-Adjusted Performance

Very Weak

Over the last 90 days BetaShares Global Sustainability 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 ISharesGlobal 100 and BetaShares Global

The main advantage of trading using opposite ISharesGlobal 100 and BetaShares Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ISharesGlobal 100 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 iSharesGlobal 100 and BetaShares Global Sustainability 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.