Correlation Between SPDR Gold and Expat Poland
Can any of the company-specific risk be diversified away by investing in both SPDR Gold and Expat Poland 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 Expat Poland 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 Expat Poland WIG20, you can compare the effects of market volatilities on SPDR Gold and Expat Poland 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 Expat Poland. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR Gold and Expat Poland.
Diversification Opportunities for SPDR Gold and Expat Poland
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between SPDR and Expat is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding SPDR Gold Shares and Expat Poland WIG20 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Expat Poland WIG20 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 Expat Poland. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Expat Poland WIG20 has no effect on the direction of SPDR Gold i.e., SPDR Gold and Expat Poland go up and down completely randomly.
Pair Corralation between SPDR Gold and Expat Poland
Assuming the 90 days trading horizon SPDR Gold is expected to generate 24.94 times less return on investment than Expat Poland. But when comparing it to its historical volatility, SPDR Gold Shares is 2.94 times less risky than Expat Poland. It trades about 0.01 of its potential returns per unit of risk. Expat Poland WIG20 is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 58.00 in Expat Poland WIG20 on September 5, 2024 and sell it today you would earn a total of 2.00 from holding Expat Poland WIG20 or generate 3.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPDR Gold Shares vs. Expat Poland WIG20
Performance |
| Timeline |
| SPDR Gold Shares |
| Expat Poland WIG20 |
SPDR Gold and Expat Poland Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR Gold and Expat Poland
The main advantage of trading using opposite SPDR Gold and Expat Poland positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR Gold position performs unexpectedly, Expat Poland 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 Expat Poland will offset losses from the drop in Expat Poland's long position.| SPDR Gold vs. SPDR Barclays 10 | SPDR Gold vs. SPDR ICE BofA | SPDR Gold vs. SPDR SP Utilities | SPDR Gold vs. SPDR ICE BofA |
| Expat Poland vs. UBS Fund Solutions | Expat Poland vs. Xtrackers II | Expat Poland vs. Xtrackers Nikkei 225 | Expat Poland vs. SPDR Gold Shares |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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