Correlation Between GoldMining and IShares Physical
Can any of the company-specific risk be diversified away by investing in both GoldMining and IShares Physical 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 GoldMining and IShares Physical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GoldMining and iShares Physical Silver, you can compare the effects of market volatilities on GoldMining and IShares Physical 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 GoldMining with a short position of IShares Physical. Check out your portfolio center. Please also check ongoing floating volatility patterns of GoldMining and IShares Physical.
Diversification Opportunities for GoldMining and IShares Physical
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between GoldMining and IShares is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding GoldMining and iShares Physical Silver in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Physical Silver and GoldMining 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 GoldMining are associated (or correlated) with IShares Physical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Physical Silver has no effect on the direction of GoldMining i.e., GoldMining and IShares Physical go up and down completely randomly.
Pair Corralation between GoldMining and IShares Physical
Assuming the 90 days trading horizon GoldMining is expected to generate 1.26 times less return on investment than IShares Physical. In addition to that, GoldMining is 1.72 times more volatile than iShares Physical Silver. It trades about 0.04 of its total potential returns per unit of risk. iShares Physical Silver is currently generating about 0.08 per unit of volatility. If you would invest 2,142 in iShares Physical Silver on November 3, 2024 and sell it today you would earn a total of 860.00 from holding iShares Physical Silver or generate 40.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 49.8% |
| Values | Daily Returns |
GoldMining vs. iShares Physical Silver
Performance |
| Timeline |
| GoldMining |
| iShares Physical Silver |
GoldMining and IShares Physical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GoldMining and IShares Physical
The main advantage of trading using opposite GoldMining and IShares Physical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GoldMining position performs unexpectedly, IShares Physical 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 IShares Physical will offset losses from the drop in IShares Physical's long position.| GoldMining vs. Summit Materials Cl | GoldMining vs. First Majestic Silver | GoldMining vs. Qurate Retail Series | GoldMining vs. Lundin Mining Corp |
| IShares Physical vs. Vitec Software Group | IShares Physical vs. Learning Technologies Group | IShares Physical vs. Take Two Interactive Software | IShares Physical vs. Check Point Software |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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