Correlation Between DB Gold and VanEck Junior
Can any of the company-specific risk be diversified away by investing in both DB Gold and VanEck Junior 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 DB Gold and VanEck Junior into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DB Gold Double and VanEck Junior Gold, you can compare the effects of market volatilities on DB Gold and VanEck Junior 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 DB Gold with a short position of VanEck Junior. Check out your portfolio center. Please also check ongoing floating volatility patterns of DB Gold and VanEck Junior.
Diversification Opportunities for DB Gold and VanEck Junior
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between DGP and VanEck is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding DB Gold Double and VanEck Junior Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VanEck Junior Gold and DB 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 DB Gold Double are associated (or correlated) with VanEck Junior. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VanEck Junior Gold has no effect on the direction of DB Gold i.e., DB Gold and VanEck Junior go up and down completely randomly.
Pair Corralation between DB Gold and VanEck Junior
Considering the 90-day investment horizon DB Gold Double is expected to generate 1.22 times more return on investment than VanEck Junior. However, DB Gold is 1.22 times more volatile than VanEck Junior Gold. It trades about -0.13 of its potential returns per unit of risk. VanEck Junior Gold is currently generating about -0.23 per unit of risk. If you would invest 7,231 in DB Gold Double on August 29, 2024 and sell it today you would lose (597.00) from holding DB Gold Double or give up 8.26% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
DB Gold Double vs. VanEck Junior Gold
Performance |
| Timeline |
| DB Gold Double |
| VanEck Junior Gold |
DB Gold and VanEck Junior Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DB Gold and VanEck Junior
The main advantage of trading using opposite DB Gold and VanEck Junior positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DB Gold position performs unexpectedly, VanEck Junior 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 VanEck Junior will offset losses from the drop in VanEck Junior's long position.| DB Gold vs. DB Gold Double | DB Gold vs. ProShares Ultra Gold | DB Gold vs. DB Gold Short | DB Gold vs. ProShares Ultra Silver |
| VanEck Junior vs. VanEck Gold Miners | VanEck Junior vs. Global X Silver | VanEck Junior vs. Amplify ETF Trust | VanEck Junior vs. Pan American Silver |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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