Correlation Between Europac Gold and Stock Index
Can any of the company-specific risk be diversified away by investing in both Europac Gold and Stock Index 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 Europac Gold and Stock Index into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Europac Gold Fund and Stock Index Fund, you can compare the effects of market volatilities on Europac Gold and Stock Index 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 Europac Gold with a short position of Stock Index. Check out your portfolio center. Please also check ongoing floating volatility patterns of Europac Gold and Stock Index.
Diversification Opportunities for Europac Gold and Stock Index
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Europac and Stock is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Europac Gold Fund and Stock Index Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stock Index Fund and Europac 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 Europac Gold Fund are associated (or correlated) with Stock Index. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stock Index Fund has no effect on the direction of Europac Gold i.e., Europac Gold and Stock Index go up and down completely randomly.
Pair Corralation between Europac Gold and Stock Index
Assuming the 90 days horizon Europac Gold Fund is expected to generate 1.62 times more return on investment than Stock Index. However, Europac Gold is 1.62 times more volatile than Stock Index Fund. It trades about 0.21 of its potential returns per unit of risk. Stock Index Fund is currently generating about 0.08 per unit of risk. If you would invest 924.00 in Europac Gold Fund on October 24, 2024 and sell it today you would earn a total of 51.00 from holding Europac Gold Fund or generate 5.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Europac Gold Fund vs. Stock Index Fund
Performance |
| Timeline |
| Europac Gold |
| Stock Index Fund |
Europac Gold and Stock Index Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Europac Gold and Stock Index
The main advantage of trading using opposite Europac Gold and Stock Index positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Europac Gold position performs unexpectedly, Stock Index 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 Stock Index will offset losses from the drop in Stock Index's long position.| Europac Gold vs. Europac International Value | Europac Gold vs. Europac International Dividend | Europac Gold vs. Ep Emerging Markets | Europac Gold vs. Europac International Bond |
| Stock Index vs. Hunter Small Cap | Stock Index vs. Small Pany Growth | Stock Index vs. Smallcap Fund Fka | Stock Index vs. Glg Intl Small |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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