Correlation Between SPDR Gold and Zillow Group
Can any of the company-specific risk be diversified away by investing in both SPDR Gold and Zillow Group 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 Zillow Group 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 Zillow Group Class, you can compare the effects of market volatilities on SPDR Gold and Zillow Group 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 Zillow Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR Gold and Zillow Group.
Diversification Opportunities for SPDR Gold and Zillow Group
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SPDR and Zillow is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding SPDR Gold Shares and Zillow Group Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zillow Group Class 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 Zillow Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zillow Group Class has no effect on the direction of SPDR Gold i.e., SPDR Gold and Zillow Group go up and down completely randomly.
Pair Corralation between SPDR Gold and Zillow Group
Considering the 90-day investment horizon SPDR Gold is expected to generate 15.03 times less return on investment than Zillow Group. But when comparing it to its historical volatility, SPDR Gold Shares is 3.56 times less risky than Zillow Group. It trades about 0.04 of its potential returns per unit of risk. Zillow Group Class is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 5,980 in Zillow Group Class on November 1, 2024 and sell it today you would earn a total of 2,412 from holding Zillow Group Class or generate 40.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPDR Gold Shares vs. Zillow Group Class
Performance |
| Timeline |
| SPDR Gold Shares |
| Zillow Group Class |
SPDR Gold and Zillow Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR Gold and Zillow Group
The main advantage of trading using opposite SPDR Gold and Zillow Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR Gold position performs unexpectedly, Zillow Group 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 Zillow Group will offset losses from the drop in Zillow Group'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 |
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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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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