Correlation Between SPDR SPASX and BetaShares Managed

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

Diversification Opportunities for SPDR SPASX and BetaShares Managed

-0.14

Correlation Coefficient

SPDR SPASX  BetaShares Managed

Good diversification

The 3 months correlation between SPDR and BetaShares is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding SPDR SPASX 200 and BetaShares Managed Risk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BetaShares Managed Risk 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 Managed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BetaShares Managed Risk has no effect on the direction of SPDR SPASX i.e., SPDR SPASX and BetaShares Managed go up and down completely randomly.

Pair Corralation between SPDR SPASX and BetaShares Managed

Assuming the 90 days trading horizon SPDR SPASX 200 is expected to under-perform the BetaShares Managed. In addition to that, SPDR SPASX is 1.64 times more volatile than BetaShares Managed Risk. It trades about -0.33 of its total potential returns per unit of risk. BetaShares Managed Risk is currently generating about -0.14 per unit of volatility. If you would invest  2,140  in BetaShares Managed Risk on December 2, 2024 and sell it today you would lose (39.00) from holding BetaShares Managed Risk or give up 1.82% of portfolio value over 90 days.

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

SPDR SPASX 200  vs.  BetaShares Managed Risk

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 latest uncertain performance, the Etf's technical and fundamental 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.

BetaShares Managed Risk

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in BetaShares Managed Risk are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, BetaShares Managed 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 SPDR SPASX and BetaShares Managed

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

The idea behind SPDR SPASX 200 and BetaShares Managed Risk 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.