Correlation Between IShares Bloomberg and SPDR Gold
Can any of the company-specific risk be diversified away by investing in both IShares Bloomberg and SPDR Gold 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 IShares Bloomberg and SPDR Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Bloomberg Roll and SPDR Gold MiniShares, you can compare the effects of market volatilities on IShares Bloomberg and SPDR Gold 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 IShares Bloomberg with a short position of SPDR Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Bloomberg and SPDR Gold.
Diversification Opportunities for IShares Bloomberg and SPDR Gold
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between IShares and SPDR is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding iShares Bloomberg Roll and SPDR Gold MiniShares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR Gold MiniShares and IShares Bloomberg 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 iShares Bloomberg Roll are associated (or correlated) with SPDR Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR Gold MiniShares has no effect on the direction of IShares Bloomberg i.e., IShares Bloomberg and SPDR Gold go up and down completely randomly.
Pair Corralation between IShares Bloomberg and SPDR Gold
Given the investment horizon of 90 days IShares Bloomberg is expected to generate 4.62 times less return on investment than SPDR Gold. But when comparing it to its historical volatility, iShares Bloomberg Roll is 1.36 times less risky than SPDR Gold. It trades about 0.04 of its potential returns per unit of risk. SPDR Gold MiniShares is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 4,025 in SPDR Gold MiniShares on September 2, 2024 and sell it today you would earn a total of 1,245 from holding SPDR Gold MiniShares or generate 30.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares Bloomberg Roll vs. SPDR Gold MiniShares
Performance |
| Timeline |
| iShares Bloomberg Roll |
| SPDR Gold MiniShares |
IShares Bloomberg and SPDR Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Bloomberg and SPDR Gold
The main advantage of trading using opposite IShares Bloomberg and SPDR Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Bloomberg position performs unexpectedly, SPDR Gold 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 SPDR Gold will offset losses from the drop in SPDR Gold's long position.| IShares Bloomberg vs. abrdn Bloomberg All | IShares Bloomberg vs. GraniteShares Bloomberg Commodity | IShares Bloomberg vs. iShares GSCI Commodity | IShares Bloomberg vs. abrdn Bloomberg All |
| SPDR Gold vs. MicroSectors Gold 3X | SPDR Gold vs. Franklin Responsibly Sourced | SPDR Gold vs. ProShares Ultra Silver | SPDR Gold vs. GraniteShares Gold Trust |
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.
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