Correlation Between Global Gold and Transamerica Large
Can any of the company-specific risk be diversified away by investing in both Global Gold and Transamerica Large 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 Transamerica Large 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 Transamerica Large Cap, you can compare the effects of market volatilities on Global Gold and Transamerica Large 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 Transamerica Large. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Gold and Transamerica Large.
Diversification Opportunities for Global Gold and Transamerica Large
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Global and Transamerica is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Global Gold Fund and Transamerica Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Transamerica Large Cap 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 Transamerica Large. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Transamerica Large Cap has no effect on the direction of Global Gold i.e., Global Gold and Transamerica Large go up and down completely randomly.
Pair Corralation between Global Gold and Transamerica Large
Assuming the 90 days horizon Global Gold Fund is expected to generate 2.14 times more return on investment than Transamerica Large. However, Global Gold is 2.14 times more volatile than Transamerica Large Cap. It trades about 0.05 of its potential returns per unit of risk. Transamerica Large Cap is currently generating about -0.07 per unit of risk. If you would invest 1,264 in Global Gold Fund on October 26, 2024 and sell it today you would earn a total of 34.00 from holding Global Gold Fund or generate 2.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global Gold Fund vs. Transamerica Large Cap
Performance |
| Timeline |
| Global Gold Fund |
| Transamerica Large Cap |
Global Gold and Transamerica Large Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Gold and Transamerica Large
The main advantage of trading using opposite Global Gold and Transamerica Large positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Gold position performs unexpectedly, Transamerica Large 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 Transamerica Large will offset losses from the drop in Transamerica Large'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 |
| Transamerica Large vs. Oppenheimer Gold Special | Transamerica Large vs. Sprott Gold Equity | Transamerica Large vs. First Eagle Gold | Transamerica Large vs. Global 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 Transaction History module to view history of all your transactions and understand their impact on performance.
Other Complementary Tools
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format |