Correlation Between Gold Bullion and SPDR SP
Can any of the company-specific risk be diversified away by investing in both Gold Bullion and SPDR SP 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 Gold Bullion and SPDR SP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gold Bullion Securities and SPDR SP 500, you can compare the effects of market volatilities on Gold Bullion and SPDR SP 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 Gold Bullion with a short position of SPDR SP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gold Bullion and SPDR SP.
Diversification Opportunities for Gold Bullion and SPDR SP
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Gold and SPDR is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Gold Bullion Securities and SPDR SP 500 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR SP 500 and Gold Bullion 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 Gold Bullion Securities are associated (or correlated) with SPDR SP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR SP 500 has no effect on the direction of Gold Bullion i.e., Gold Bullion and SPDR SP go up and down completely randomly.
Pair Corralation between Gold Bullion and SPDR SP
If you would invest 25,008 in Gold Bullion Securities on January 4, 2025 and sell it today you would earn a total of 219.00 from holding Gold Bullion Securities or generate 0.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Gold Bullion Securities vs. SPDR SP 500
Performance |
| Timeline |
| Gold Bullion Securities |
| SPDR SP 500 |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
Gold Bullion and SPDR SP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gold Bullion and SPDR SP
The main advantage of trading using opposite Gold Bullion and SPDR SP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gold Bullion position performs unexpectedly, SPDR SP 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 SP will offset losses from the drop in SPDR SP's long position.| Gold Bullion vs. Amundi Index Solutions | Gold Bullion vs. Multi Units Luxembourg | Gold Bullion vs. iShares Digital Entertainment | Gold Bullion vs. Amundi Index Solutions |
| SPDR SP vs. SPDR MSCI Europe | SPDR SP vs. SPDR MSCI Europe | SPDR SP vs. SPDR Barclays Cap | SPDR SP vs. SPDR SP 500 |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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