Correlation Between SPDR Gold and Global X
Can any of the company-specific risk be diversified away by investing in both SPDR Gold and Global X 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 Global X 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 Global X Silver, you can compare the effects of market volatilities on SPDR Gold and Global X 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 Global X. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR Gold and Global X.
Diversification Opportunities for SPDR Gold and Global X
Almost no diversification
The 3 months correlation between SPDR and Global is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding SPDR Gold Shares and Global X Silver in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global X Silver 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 Global X. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global X Silver has no effect on the direction of SPDR Gold i.e., SPDR Gold and Global X go up and down completely randomly.
Pair Corralation between SPDR Gold and Global X
Considering the 90-day investment horizon SPDR Gold Shares is expected to generate 0.56 times more return on investment than Global X. However, SPDR Gold Shares is 1.78 times less risky than Global X. It trades about -0.14 of its potential returns per unit of risk. Global X Silver is currently generating about -0.28 per unit of risk. If you would invest 25,333 in SPDR Gold Shares on August 28, 2024 and sell it today you would lose (1,085) from holding SPDR Gold Shares or give up 4.28% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
SPDR Gold Shares vs. Global X Silver
Performance |
| Timeline |
| SPDR Gold Shares |
| Global X Silver |
SPDR Gold and Global X Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR Gold and Global X
The main advantage of trading using opposite SPDR Gold and Global X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR Gold position performs unexpectedly, Global X 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 Global X will offset losses from the drop in Global X'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 |
| Global X vs. Amplify ETF Trust | Global X vs. VanEck Junior Gold | Global X vs. Pan American Silver | Global X vs. Coeur Mining |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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