Correlation Between Gold Bullion and SPDR MSCI
Can any of the company-specific risk be diversified away by investing in both Gold Bullion and SPDR MSCI 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 MSCI 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 MSCI Europe, you can compare the effects of market volatilities on Gold Bullion and SPDR MSCI 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 MSCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gold Bullion and SPDR MSCI.
Diversification Opportunities for Gold Bullion and SPDR MSCI
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Gold and SPDR is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Gold Bullion Securities and SPDR MSCI Europe in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR MSCI Europe 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 MSCI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR MSCI Europe has no effect on the direction of Gold Bullion i.e., Gold Bullion and SPDR MSCI go up and down completely randomly.
Pair Corralation between Gold Bullion and SPDR MSCI
Assuming the 90 days trading horizon Gold Bullion Securities is expected to generate 0.82 times more return on investment than SPDR MSCI. However, Gold Bullion Securities is 1.23 times less risky than SPDR MSCI. It trades about 0.06 of its potential returns per unit of risk. SPDR MSCI Europe is currently generating about -0.36 per unit of risk. If you would invest 23,139 in Gold Bullion Securities on August 24, 2024 and sell it today you would earn a total of 247.00 from holding Gold Bullion Securities or generate 1.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gold Bullion Securities vs. SPDR MSCI Europe
Performance |
| Timeline |
| Gold Bullion Securities |
| SPDR MSCI Europe |
Gold Bullion and SPDR MSCI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gold Bullion and SPDR MSCI
The main advantage of trading using opposite Gold Bullion and SPDR MSCI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gold Bullion position performs unexpectedly, SPDR MSCI 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 MSCI will offset losses from the drop in SPDR MSCI'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 MSCI vs. SSgA SPDR ETFs | SPDR MSCI vs. SPDR MSCI Europe | SPDR MSCI vs. SPDR MSCI Europe | SPDR MSCI vs. SPDR MSCI Europe |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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