Correlation Between SPDR SPASX and BetaShares Global

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

By analyzing existing cross correlation between SPDR SPASX 200 and BetaShares Global Banks, you can compare the effects of market volatilities on SPDR SPASX 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 SPDR SPASX with a short position of BetaShares Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR SPASX and BetaShares Global.

Diversification Opportunities for SPDR SPASX and BetaShares Global

0.47

Correlation Coefficient

SPDR SPASX  BetaShares Global

Very weak diversification

The 3 months correlation between SPDR and BetaShares is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding SPDR SPASX 200 and BetaShares Global Banks in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BetaShares Global Banks and SPDR SPASX 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 SPDR SPASX 200 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 Banks has no effect on the direction of SPDR SPASX i.e., SPDR SPASX and BetaShares Global go up and down completely randomly.

Pair Corralation between SPDR SPASX and BetaShares Global

Assuming the 90 days trading horizon SPDR SPASX 200 is expected to under-perform the BetaShares Global. In addition to that, SPDR SPASX is 1.16 times more volatile than BetaShares Global Banks. It trades about 0.0 of its total potential returns per unit of risk. BetaShares Global Banks is currently generating about 0.11 per unit of volatility. If you would invest  562.00  in BetaShares Global Banks on December 4, 2024 and sell it today you would earn a total of  370.00  from holding BetaShares Global Banks or generate 65.84% return on investment over 90 days.

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

SPDR SPASX 200  vs.  BetaShares Global Banks

SPDR SPASX 200

Risk-Adjusted Performance

Very Weak

Over the last 90 days SPDR SPASX 200 has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, SPDR SPASX is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

BetaShares Global Banks

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in BetaShares Global Banks are ranked lower than 13 (%) 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 April 2025.

Pair Trading with SPDR SPASX and BetaShares Global

The main advantage of trading using opposite SPDR SPASX and BetaShares Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR SPASX 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 SPDR SPASX 200 and BetaShares Global Banks 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.

Check out your portfolio center.

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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.