Correlation Between SPDR Gold and First Trust
Can any of the company-specific risk be diversified away by investing in both SPDR Gold and First Trust 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 SPDR Gold and First Trust into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPDR Gold Trust and First Trust FTSE, you can compare the effects of market volatilities on SPDR Gold and First Trust 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 SPDR Gold with a short position of First Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR Gold and First Trust.
Diversification Opportunities for SPDR Gold and First Trust
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SPDR and First is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding SPDR Gold Trust and First Trust FTSE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Trust FTSE and SPDR 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 SPDR Gold Trust are associated (or correlated) with First Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Trust FTSE has no effect on the direction of SPDR Gold i.e., SPDR Gold and First Trust go up and down completely randomly.
Pair Corralation between SPDR Gold and First Trust
If you would invest 84,000 in First Trust FTSE on August 31, 2024 and sell it today you would earn a total of 0.00 from holding First Trust FTSE or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPDR Gold Trust vs. First Trust FTSE
Performance |
| Timeline |
| SPDR Gold Trust |
| First Trust FTSE |
SPDR Gold and First Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR Gold and First Trust
The main advantage of trading using opposite SPDR Gold and First Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR Gold position performs unexpectedly, First Trust 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 First Trust will offset losses from the drop in First Trust's long position.| SPDR Gold vs. SPDR Dow Jones | SPDR Gold vs. SPDR SP 500 | SPDR Gold vs. SPDR Series Trust | SPDR Gold vs. SPDR SP Regional |
| First Trust vs. Promotora y Operadora | First Trust vs. UnitedHealth Group Incorporated | First Trust vs. Qulitas Controladora SAB | First Trust vs. Hoteles City Express |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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