Correlation Between SPDR Gold and Vanguard LifeStrategy
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By analyzing existing cross correlation between SPDR Gold Shares and Vanguard LifeStrategy 60, you can compare the effects of market volatilities on SPDR Gold and Vanguard LifeStrategy 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 Vanguard LifeStrategy. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR Gold and Vanguard LifeStrategy.
Diversification Opportunities for SPDR Gold and Vanguard LifeStrategy
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between SPDR and Vanguard is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding SPDR Gold Shares and Vanguard LifeStrategy 60 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard LifeStrategy 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 Vanguard LifeStrategy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard LifeStrategy has no effect on the direction of SPDR Gold i.e., SPDR Gold and Vanguard LifeStrategy go up and down completely randomly.
Pair Corralation between SPDR Gold and Vanguard LifeStrategy
Assuming the 90 days trading horizon SPDR Gold Shares is expected to under-perform the Vanguard LifeStrategy. In addition to that, SPDR Gold is 2.26 times more volatile than Vanguard LifeStrategy 60. It trades about -0.09 of its total potential returns per unit of risk. Vanguard LifeStrategy 60 is currently generating about 0.18 per unit of volatility. If you would invest 3,141 in Vanguard LifeStrategy 60 on August 30, 2024 and sell it today you would earn a total of 72.00 from holding Vanguard LifeStrategy 60 or generate 2.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
SPDR Gold Shares vs. Vanguard LifeStrategy 60
Performance |
| Timeline |
| SPDR Gold Shares |
| Vanguard LifeStrategy |
SPDR Gold and Vanguard LifeStrategy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR Gold and Vanguard LifeStrategy
The main advantage of trading using opposite SPDR Gold and Vanguard LifeStrategy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR Gold position performs unexpectedly, Vanguard LifeStrategy 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 Vanguard LifeStrategy will offset losses from the drop in Vanguard LifeStrategy's long position.| SPDR Gold vs. UBS Fund Solutions | SPDR Gold vs. Xtrackers Nikkei 225 | SPDR Gold vs. iShares VII PLC | SPDR Gold vs. Vanguard Funds Public |
| Vanguard LifeStrategy vs. Vanguard ESG Developed | Vanguard LifeStrategy vs. Vanguard Funds Public | Vanguard LifeStrategy vs. Vanguard Funds PLC | Vanguard LifeStrategy vs. Vanguard Funds Public |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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