Correlation Between VanEck Junior and US Global
Can any of the company-specific risk be diversified away by investing in both VanEck Junior and US Global 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 VanEck Junior and US Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VanEck Junior Gold and US Global GO, you can compare the effects of market volatilities on VanEck Junior and US Global 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 VanEck Junior with a short position of US Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of VanEck Junior and US Global.
Diversification Opportunities for VanEck Junior and US Global
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between VanEck and GOAU is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding VanEck Junior Gold and US Global GO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on US Global GO and VanEck Junior 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 VanEck Junior Gold are associated (or correlated) with US Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of US Global GO has no effect on the direction of VanEck Junior i.e., VanEck Junior and US Global go up and down completely randomly.
Pair Corralation between VanEck Junior and US Global
Given the investment horizon of 90 days VanEck Junior Gold is expected to generate 1.15 times more return on investment than US Global. However, VanEck Junior is 1.15 times more volatile than US Global GO. It trades about 0.05 of its potential returns per unit of risk. US Global GO is currently generating about 0.06 per unit of risk. If you would invest 3,793 in VanEck Junior Gold on August 24, 2024 and sell it today you would earn a total of 1,050 from holding VanEck Junior Gold or generate 27.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
VanEck Junior Gold vs. US Global GO
Performance |
| Timeline |
| VanEck Junior Gold |
| US Global GO |
VanEck Junior and US Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VanEck Junior and US Global
The main advantage of trading using opposite VanEck Junior and US Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VanEck Junior position performs unexpectedly, US Global 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 US Global will offset losses from the drop in US Global's long position.| VanEck Junior vs. iShares Silver Trust | VanEck Junior vs. SPDR Gold Shares | VanEck Junior vs. Newmont Goldcorp Corp | VanEck Junior vs. Direxion Daily Gold |
| US Global vs. VanEck Junior Gold | US Global vs. iShares Silver Trust | US Global vs. SPDR Gold Shares | US Global vs. Newmont Goldcorp Corp |
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 Channel module to use Commodity Channel Index to analyze current equity momentum.
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