Correlation Between SPDR Gold and Teucrium Sugar
Can any of the company-specific risk be diversified away by investing in both SPDR Gold and Teucrium Sugar 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 Teucrium Sugar into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPDR Gold Shares and Teucrium Sugar, you can compare the effects of market volatilities on SPDR Gold and Teucrium Sugar 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 Teucrium Sugar. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR Gold and Teucrium Sugar.
Diversification Opportunities for SPDR Gold and Teucrium Sugar
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SPDR and Teucrium is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding SPDR Gold Shares and Teucrium Sugar in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Teucrium Sugar 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 Shares are associated (or correlated) with Teucrium Sugar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Teucrium Sugar has no effect on the direction of SPDR Gold i.e., SPDR Gold and Teucrium Sugar go up and down completely randomly.
Pair Corralation between SPDR Gold and Teucrium Sugar
Considering the 90-day investment horizon SPDR Gold Shares is expected to generate 0.62 times more return on investment than Teucrium Sugar. However, SPDR Gold Shares is 1.6 times less risky than Teucrium Sugar. It trades about 0.09 of its potential returns per unit of risk. Teucrium Sugar is currently generating about 0.05 per unit of risk. If you would invest 16,726 in SPDR Gold Shares on August 23, 2024 and sell it today you would earn a total of 7,736 from holding SPDR Gold Shares or generate 46.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPDR Gold Shares vs. Teucrium Sugar
Performance |
| Timeline |
| SPDR Gold Shares |
| Teucrium Sugar |
SPDR Gold and Teucrium Sugar Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR Gold and Teucrium Sugar
The main advantage of trading using opposite SPDR Gold and Teucrium Sugar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR Gold position performs unexpectedly, Teucrium Sugar 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 Teucrium Sugar will offset losses from the drop in Teucrium Sugar's long position.| SPDR Gold vs. iShares Silver Trust | SPDR Gold vs. VanEck Gold Miners | SPDR Gold vs. SPDR SP 500 | SPDR Gold vs. United States Oil |
| Teucrium Sugar vs. Teucrium Soybean | Teucrium Sugar vs. Teucrium Wheat | Teucrium Sugar vs. Teucrium Corn |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
Other Complementary Tools
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges |