Correlation Between Beta Shares and Global X

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

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

Diversification Opportunities for Beta Shares and Global X

0.32

Correlation Coefficient

Beta Shares  Global X

Weak diversification

The 3 months correlation between Beta and Global is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Beta Shares SPASX and Global X Hydrogen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global X Hydrogen and Beta Shares 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 Beta Shares SPASX 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 Hydrogen has no effect on the direction of Beta Shares i.e., Beta Shares and Global X go up and down completely randomly.

Pair Corralation between Beta Shares and Global X

Assuming the 90 days trading horizon Beta Shares SPASX is expected to generate 0.55 times more return on investment than Global X. However, Beta Shares SPASX is 1.82 times less risky than Global X. It trades about -0.03 of its potential returns per unit of risk. Global X Hydrogen is currently generating about -0.09 per unit of risk. If you would invest  1,615  in Beta Shares SPASX on December 29, 2024 and sell it today you would lose (39.00) from holding Beta Shares SPASX or give up 2.41% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.44%
Values	Daily Returns

Beta Shares SPASX  vs.  Global X Hydrogen

Beta Shares SPASX

Risk-Adjusted Performance

Very Weak

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

Global X Hydrogen

Risk-Adjusted Performance

Very Weak

Over the last 90 days Global X Hydrogen 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 Beta Shares and Global X

The main advantage of trading using opposite Beta Shares and Global X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beta Shares 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 Beta Shares SPASX and Global X Hydrogen 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.