Correlation Between SPDR Gold and LYXOR Index
Can any of the company-specific risk be diversified away by investing in both SPDR Gold and LYXOR Index 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 LYXOR Index 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 LYXOR Index Fund, you can compare the effects of market volatilities on SPDR Gold and LYXOR Index 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 LYXOR Index. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR Gold and LYXOR Index.
Diversification Opportunities for SPDR Gold and LYXOR Index
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SPDR and LYXOR is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding SPDR Gold Shares and LYXOR Index Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LYXOR Index Fund 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 LYXOR Index. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LYXOR Index Fund has no effect on the direction of SPDR Gold i.e., SPDR Gold and LYXOR Index go up and down completely randomly.
Pair Corralation between SPDR Gold and LYXOR Index
Assuming the 90 days trading horizon SPDR Gold Shares is expected to generate 0.59 times more return on investment than LYXOR Index. However, SPDR Gold Shares is 1.69 times less risky than LYXOR Index. It trades about 0.11 of its potential returns per unit of risk. LYXOR Index Fund is currently generating about 0.03 per unit of risk. If you would invest 16,752 in SPDR Gold Shares on August 31, 2024 and sell it today you would earn a total of 6,179 from holding SPDR Gold Shares or generate 36.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPDR Gold Shares vs. LYXOR Index Fund
Performance |
| Timeline |
| SPDR Gold Shares |
| LYXOR Index Fund |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
SPDR Gold and LYXOR Index Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR Gold and LYXOR Index
The main advantage of trading using opposite SPDR Gold and LYXOR Index positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR Gold position performs unexpectedly, LYXOR Index 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 LYXOR Index will offset losses from the drop in LYXOR Index's long position.| SPDR Gold vs. UBS Fund Solutions | SPDR Gold vs. Xtrackers II | SPDR Gold vs. Xtrackers Nikkei 225 | SPDR Gold vs. iShares VII PLC |
| LYXOR Index vs. LYXOR EURO STOXX | LYXOR Index vs. LYXOR DAILY SHORTDAX | LYXOR Index vs. LYXOR EURO STOXX | LYXOR Index vs. LYXOR DAILY SHORTDAX |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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