Correlation Between SPDR Gold and ProShares
Can any of the company-specific risk be diversified away by investing in both SPDR Gold and ProShares 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 ProShares 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 ProShares K 1 Free, you can compare the effects of market volatilities on SPDR Gold and ProShares 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 ProShares. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR Gold and ProShares.
Diversification Opportunities for SPDR Gold and ProShares
Average diversification
The 3 months correlation between SPDR and ProShares is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding SPDR Gold Shares and ProShares K 1 Free in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares K 1 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 ProShares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProShares K 1 has no effect on the direction of SPDR Gold i.e., SPDR Gold and ProShares go up and down completely randomly.
Pair Corralation between SPDR Gold and ProShares
Considering the 90-day investment horizon SPDR Gold is expected to generate 2.38 times less return on investment than ProShares. But when comparing it to its historical volatility, SPDR Gold Shares is 1.65 times less risky than ProShares. It trades about 0.28 of its potential returns per unit of risk. ProShares K 1 Free is currently generating about 0.41 of returns per unit of risk over similar time horizon. If you would invest 4,289 in ProShares K 1 Free on October 22, 2024 and sell it today you would earn a total of 360.00 from holding ProShares K 1 Free or generate 8.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPDR Gold Shares vs. ProShares K 1 Free
Performance |
| Timeline |
| SPDR Gold Shares |
| ProShares K 1 |
SPDR Gold and ProShares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR Gold and ProShares
The main advantage of trading using opposite SPDR Gold and ProShares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR Gold position performs unexpectedly, ProShares 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 ProShares will offset losses from the drop in ProShares' 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 |
| ProShares vs. United States 12 | ProShares vs. Credit Suisse X Links | ProShares vs. Invesco DB Oil | ProShares vs. United States 12 |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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