Correlation Between Global Gold and North Square
Can any of the company-specific risk be diversified away by investing in both Global Gold and North Square 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 Global Gold and North Square into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global Gold Fund and North Square Investments, you can compare the effects of market volatilities on Global Gold and North Square 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 Global Gold with a short position of North Square. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Gold and North Square.
Diversification Opportunities for Global Gold and North Square
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between GLOBAL and North is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Global Gold Fund and North Square Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on North Square Investments and Global Gold 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 Global Gold Fund are associated (or correlated) with North Square. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of North Square Investments has no effect on the direction of Global Gold i.e., Global Gold and North Square go up and down completely randomly.
Pair Corralation between Global Gold and North Square
Assuming the 90 days horizon Global Gold Fund is expected to generate 2.69 times more return on investment than North Square. However, Global Gold is 2.69 times more volatile than North Square Investments. It trades about 0.05 of its potential returns per unit of risk. North Square Investments is currently generating about 0.07 per unit of risk. If you would invest 969.00 in Global Gold Fund on September 5, 2024 and sell it today you would earn a total of 386.00 from holding Global Gold Fund or generate 39.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global Gold Fund vs. North Square Investments
Performance |
| Timeline |
| Global Gold Fund |
| North Square Investments |
Global Gold and North Square Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Gold and North Square
The main advantage of trading using opposite Global Gold and North Square positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Gold position performs unexpectedly, North Square 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 North Square will offset losses from the drop in North Square's long position.| Global Gold vs. Artisan High Income | Global Gold vs. Ft 7934 Corporate | Global Gold vs. Touchstone Premium Yield | Global Gold vs. Limited Term Tax |
| North Square vs. Global Gold Fund | North Square vs. International Investors Gold | North Square vs. Oppenheimer Gold Special | North Square vs. Europac Gold Fund |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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