Correlation Between SPDR Gold and VanEck Merk
Can any of the company-specific risk be diversified away by investing in both SPDR Gold and VanEck Merk 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 VanEck Merk into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPDR Gold MiniShares and VanEck Merk Gold, you can compare the effects of market volatilities on SPDR Gold and VanEck Merk 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 VanEck Merk. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR Gold and VanEck Merk.
Diversification Opportunities for SPDR Gold and VanEck Merk
1.0 | Correlation Coefficient |
No risk reduction
The 3 months correlation between SPDR and VanEck is 1.0. Overlapping area represents the amount of risk that can be diversified away by holding SPDR Gold MiniShares and VanEck Merk Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VanEck Merk Gold 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 MiniShares are associated (or correlated) with VanEck Merk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VanEck Merk Gold has no effect on the direction of SPDR Gold i.e., SPDR Gold and VanEck Merk go up and down completely randomly.
Pair Corralation between SPDR Gold and VanEck Merk
Given the investment horizon of 90 days SPDR Gold is expected to generate 1.0 times less return on investment than VanEck Merk. But when comparing it to its historical volatility, SPDR Gold MiniShares is 1.0 times less risky than VanEck Merk. It trades about 0.11 of its potential returns per unit of risk. VanEck Merk Gold is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 2,406 in VanEck Merk Gold on September 2, 2024 and sell it today you would earn a total of 162.00 from holding VanEck Merk Gold or generate 6.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPDR Gold MiniShares vs. VanEck Merk Gold
Performance |
| Timeline |
| SPDR Gold MiniShares |
| VanEck Merk Gold |
SPDR Gold and VanEck Merk Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR Gold and VanEck Merk
The main advantage of trading using opposite SPDR Gold and VanEck Merk positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR Gold position performs unexpectedly, VanEck Merk 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 VanEck Merk will offset losses from the drop in VanEck Merk's long position.| SPDR Gold vs. MicroSectors Gold 3X | SPDR Gold vs. Franklin Responsibly Sourced | SPDR Gold vs. ProShares Ultra Silver | SPDR Gold vs. GraniteShares Gold Trust |
| VanEck Merk vs. GraniteShares Gold Trust | VanEck Merk vs. Goldman Sachs Physical | VanEck Merk vs. abrdn Physical Gold | VanEck Merk vs. Sprott Gold Miners |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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