Correlation Between SPDR Gold and IShares Silver
Can any of the company-specific risk be diversified away by investing in both SPDR Gold and IShares Silver 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 IShares Silver 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 iShares Silver Trust, you can compare the effects of market volatilities on SPDR Gold and IShares Silver 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 IShares Silver. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR Gold and IShares Silver.
Diversification Opportunities for SPDR Gold and IShares Silver
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SPDR and IShares is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding SPDR Gold MiniShares and iShares Silver Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Silver Trust 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 IShares Silver. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Silver Trust has no effect on the direction of SPDR Gold i.e., SPDR Gold and IShares Silver go up and down completely randomly.
Pair Corralation between SPDR Gold and IShares Silver
Given the investment horizon of 90 days SPDR Gold MiniShares is expected to generate 0.76 times more return on investment than IShares Silver. However, SPDR Gold MiniShares is 1.31 times less risky than IShares Silver. It trades about 0.4 of its potential returns per unit of risk. iShares Silver Trust is currently generating about 0.28 per unit of risk. If you would invest 5,353 in SPDR Gold MiniShares on November 18, 2024 and sell it today you would earn a total of 364.00 from holding SPDR Gold MiniShares or generate 6.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPDR Gold MiniShares vs. iShares Silver Trust
Performance |
| Timeline |
| SPDR Gold MiniShares |
| iShares Silver Trust |
SPDR Gold and IShares Silver Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR Gold and IShares Silver
The main advantage of trading using opposite SPDR Gold and IShares Silver positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR Gold position performs unexpectedly, IShares Silver 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 IShares Silver will offset losses from the drop in IShares Silver's long position.| SPDR Gold vs. UX | SPDR Gold vs. MicroSectors Gold 3X | SPDR Gold vs. Franklin Responsibly Sourced | SPDR Gold vs. ProShares Ultra Silver |
| IShares Silver vs. SPDR Gold Shares | IShares Silver vs. VanEck Gold Miners | IShares Silver vs. United States Oil | IShares Silver vs. iShares Gold Trust |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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