Correlation Between Global Gold and Short Duration
Can any of the company-specific risk be diversified away by investing in both Global Gold and Short Duration 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 Short Duration 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 Short Duration Inflation, you can compare the effects of market volatilities on Global Gold and Short Duration 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 Short Duration. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Gold and Short Duration.
Diversification Opportunities for Global Gold and Short Duration
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Global and Short is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Global Gold Fund and Short Duration Inflation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Short Duration Inflation 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 Short Duration. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Short Duration Inflation has no effect on the direction of Global Gold i.e., Global Gold and Short Duration go up and down completely randomly.
Pair Corralation between Global Gold and Short Duration
Assuming the 90 days horizon Global Gold Fund is expected to generate 12.11 times more return on investment than Short Duration. However, Global Gold is 12.11 times more volatile than Short Duration Inflation. It trades about 0.04 of its potential returns per unit of risk. Short Duration Inflation is currently generating about 0.12 per unit of risk. If you would invest 1,207 in Global Gold Fund on October 26, 2024 and sell it today you would earn a total of 91.00 from holding Global Gold Fund or generate 7.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global Gold Fund vs. Short Duration Inflation
Performance |
| Timeline |
| Global Gold Fund |
| Short Duration Inflation |
Global Gold and Short Duration Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Gold and Short Duration
The main advantage of trading using opposite Global Gold and Short Duration positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Gold position performs unexpectedly, Short Duration 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 Short Duration will offset losses from the drop in Short Duration's long position.| Global Gold vs. Ab Bond Inflation | Global Gold vs. Gmo High Yield | Global Gold vs. Siit High Yield | Global Gold vs. Rbc Ultra Short Fixed |
| Short Duration vs. James Balanced Golden | Short Duration vs. Global Gold Fund | Short Duration vs. Gabelli Gold Fund | Short Duration vs. Precious Metals And |
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.
Other Complementary Tools
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios |