Correlation Between BetaPro Gold and Vanguard Canadian
Can any of the company-specific risk be diversified away by investing in both BetaPro Gold and Vanguard Canadian 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 BetaPro Gold and Vanguard Canadian into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BetaPro Gold Bullion and Vanguard Canadian Government, you can compare the effects of market volatilities on BetaPro Gold and Vanguard Canadian 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 BetaPro Gold with a short position of Vanguard Canadian. Check out your portfolio center. Please also check ongoing floating volatility patterns of BetaPro Gold and Vanguard Canadian.
Diversification Opportunities for BetaPro Gold and Vanguard Canadian
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between BetaPro and Vanguard is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding BetaPro Gold Bullion and Vanguard Canadian Government in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard Canadian and BetaPro 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 BetaPro Gold Bullion are associated (or correlated) with Vanguard Canadian. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard Canadian has no effect on the direction of BetaPro Gold i.e., BetaPro Gold and Vanguard Canadian go up and down completely randomly.
Pair Corralation between BetaPro Gold and Vanguard Canadian
Assuming the 90 days trading horizon BetaPro Gold Bullion is expected to generate 137.61 times more return on investment than Vanguard Canadian. However, BetaPro Gold is 137.61 times more volatile than Vanguard Canadian Government. It trades about 0.22 of its potential returns per unit of risk. Vanguard Canadian Government is currently generating about 0.17 per unit of risk. If you would invest 607.00 in BetaPro Gold Bullion on September 3, 2024 and sell it today you would earn a total of 2,001 from holding BetaPro Gold Bullion or generate 329.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BetaPro Gold Bullion vs. Vanguard Canadian Government
Performance |
| Timeline |
| BetaPro Gold Bullion |
| Vanguard Canadian |
BetaPro Gold and Vanguard Canadian Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BetaPro Gold and Vanguard Canadian
The main advantage of trading using opposite BetaPro Gold and Vanguard Canadian positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BetaPro Gold position performs unexpectedly, Vanguard Canadian 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 Canadian will offset losses from the drop in Vanguard Canadian's long position.| BetaPro Gold vs. BetaPro Gold Bullion | BetaPro Gold vs. BetaPro SP TSX | BetaPro Gold vs. BetaPro SPTSX Capped | BetaPro Gold vs. BetaPro Silver 2x |
| Vanguard Canadian vs. BMO Short Corporate | Vanguard Canadian vs. BMO High Yield | Vanguard Canadian vs. iShares Core Canadian | Vanguard Canadian vs. Harvest Global REIT |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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