Correlation Between BetaPro SP and BetaPro Canadian

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

By analyzing existing cross correlation between BetaPro SP 500 and BetaPro Canadian Gold, you can compare the effects of market volatilities on BetaPro SP and BetaPro Canadian 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 BetaPro SP with a short position of BetaPro Canadian. Check out your portfolio center. Please also check ongoing floating volatility patterns of BetaPro SP and BetaPro Canadian.

Diversification Opportunities for BetaPro SP and BetaPro Canadian

-0.54

Correlation Coefficient

BetaPro SP  BetaPro Canadian

Excellent diversification

The 3 months correlation between BetaPro and BetaPro is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding BetaPro SP 500 and BetaPro Canadian Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BetaPro Canadian Gold and BetaPro SP 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 BetaPro SP 500 are associated (or correlated) with BetaPro Canadian. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BetaPro Canadian Gold has no effect on the direction of BetaPro SP i.e., BetaPro SP and BetaPro Canadian go up and down completely randomly.

Pair Corralation between BetaPro SP and BetaPro Canadian

Assuming the 90 days trading horizon BetaPro SP 500 is expected to generate 0.35 times more return on investment than BetaPro Canadian. However, BetaPro SP 500 is 2.83 times less risky than BetaPro Canadian. It trades about 0.36 of its potential returns per unit of risk. BetaPro Canadian Gold is currently generating about -0.02 per unit of risk. If you would invest  1,975  in BetaPro SP 500 on April 22, 2025 and sell it today you would earn a total of  778.00  from holding BetaPro SP 500 or generate 39.39% return on investment over 90 days.

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

BetaPro SP 500  vs.  BetaPro Canadian Gold

BetaPro SP 500

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in BetaPro SP 500 are ranked lower than 27 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, BetaPro SP displayed solid returns over the last few months and may actually be approaching a breakup point.

BetaPro Canadian Gold

Risk-Adjusted Performance

Very Weak

Over the last 90 days BetaPro Canadian Gold has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Etf's fundamental indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the ETF investors.

Pair Trading with BetaPro SP and BetaPro Canadian

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

The idea behind BetaPro SP 500 and BetaPro Canadian Gold 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.