Correlation Between GraniteShares Gold and Invesco DB
Can any of the company-specific risk be diversified away by investing in both GraniteShares Gold and Invesco DB 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 GraniteShares Gold and Invesco DB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GraniteShares Gold Trust and Invesco DB Precious, you can compare the effects of market volatilities on GraniteShares Gold and Invesco DB 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 GraniteShares Gold with a short position of Invesco DB. Check out your portfolio center. Please also check ongoing floating volatility patterns of GraniteShares Gold and Invesco DB.
Diversification Opportunities for GraniteShares Gold and Invesco DB
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between GraniteShares and Invesco is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding GraniteShares Gold Trust and Invesco DB Precious in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco DB Precious and GraniteShares 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 GraniteShares Gold Trust are associated (or correlated) with Invesco DB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco DB Precious has no effect on the direction of GraniteShares Gold i.e., GraniteShares Gold and Invesco DB go up and down completely randomly.
Pair Corralation between GraniteShares Gold and Invesco DB
Considering the 90-day investment horizon GraniteShares Gold Trust is expected to generate 0.97 times more return on investment than Invesco DB. However, GraniteShares Gold Trust is 1.03 times less risky than Invesco DB. It trades about -0.11 of its potential returns per unit of risk. Invesco DB Precious is currently generating about -0.12 per unit of risk. If you would invest 2,710 in GraniteShares Gold Trust on September 1, 2024 and sell it today you would lose (85.00) from holding GraniteShares Gold Trust or give up 3.14% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
GraniteShares Gold Trust vs. Invesco DB Precious
Performance |
| Timeline |
| GraniteShares Gold Trust |
| Invesco DB Precious |
GraniteShares Gold and Invesco DB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GraniteShares Gold and Invesco DB
The main advantage of trading using opposite GraniteShares Gold and Invesco DB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GraniteShares Gold position performs unexpectedly, Invesco DB 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 Invesco DB will offset losses from the drop in Invesco DB's long position.| GraniteShares Gold vs. SPDR Gold MiniShares | GraniteShares Gold vs. Goldman Sachs Physical | GraniteShares Gold vs. abrdn Physical Gold | GraniteShares Gold vs. VanEck Merk Gold |
| Invesco DB vs. Invesco DB Energy | Invesco DB vs. Invesco DB Base | Invesco DB vs. Invesco DB Oil | Invesco DB vs. iPath Bloomberg Commodity |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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