Correlation Between Global Gold and Lsv Global
Can any of the company-specific risk be diversified away by investing in both Global Gold and Lsv Global 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 Lsv Global 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 Lsv Global Managed, you can compare the effects of market volatilities on Global Gold and Lsv Global 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 Lsv Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Gold and Lsv Global.
Diversification Opportunities for Global Gold and Lsv Global
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Global and Lsv is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Global Gold Fund and Lsv Global Managed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lsv Global Managed 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 Lsv Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lsv Global Managed has no effect on the direction of Global Gold i.e., Global Gold and Lsv Global go up and down completely randomly.
Pair Corralation between Global Gold and Lsv Global
Assuming the 90 days horizon Global Gold Fund is expected to generate 0.75 times more return on investment than Lsv Global. However, Global Gold Fund is 1.33 times less risky than Lsv Global. It trades about -0.11 of its potential returns per unit of risk. Lsv Global Managed is currently generating about -0.35 per unit of risk. If you would invest 1,262 in Global Gold Fund on October 7, 2024 and sell it today you would lose (56.00) from holding Global Gold Fund or give up 4.44% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global Gold Fund vs. Lsv Global Managed
Performance |
| Timeline |
| Global Gold Fund |
| Lsv Global Managed |
Global Gold and Lsv Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Gold and Lsv Global
The main advantage of trading using opposite Global Gold and Lsv Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Gold position performs unexpectedly, Lsv Global 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 Lsv Global will offset losses from the drop in Lsv Global's long position.| Global Gold vs. First Eagle Gold | Global Gold vs. First Eagle Gold | Global Gold vs. First Eagle Gold | Global Gold vs. Oppenheimer Gold Spec |
| Lsv Global vs. Transamerica High Yield | Lsv Global vs. Multi Manager High Yield | Lsv Global vs. Msift High Yield | Lsv Global vs. Catalystsmh High Income |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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