Correlation Between IShares Gold and GraniteShares Gold
Can any of the company-specific risk be diversified away by investing in both IShares Gold and GraniteShares Gold 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 IShares Gold and GraniteShares Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Gold Trust and GraniteShares Gold Trust, you can compare the effects of market volatilities on IShares Gold and GraniteShares Gold 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 IShares Gold with a short position of GraniteShares Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Gold and GraniteShares Gold.
Diversification Opportunities for IShares Gold and GraniteShares Gold
1.0 | Correlation Coefficient |
No risk reduction
The 3 months correlation between IShares and GraniteShares is 1.0. Overlapping area represents the amount of risk that can be diversified away by holding iShares Gold Trust and GraniteShares Gold Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GraniteShares Gold Trust and IShares 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 iShares Gold Trust are associated (or correlated) with GraniteShares Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GraniteShares Gold Trust has no effect on the direction of IShares Gold i.e., IShares Gold and GraniteShares Gold go up and down completely randomly.
Pair Corralation between IShares Gold and GraniteShares Gold
Considering the 90-day investment horizon iShares Gold Trust is expected to under-perform the GraniteShares Gold. In addition to that, IShares Gold is 1.0 times more volatile than GraniteShares Gold Trust. It trades about -0.19 of its total potential returns per unit of risk. GraniteShares Gold Trust is currently generating about -0.18 per unit of volatility. If you would invest 2,751 in GraniteShares Gold Trust on August 31, 2024 and sell it today you would lose (147.00) from holding GraniteShares Gold Trust or give up 5.34% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares Gold Trust vs. GraniteShares Gold Trust
Performance |
| Timeline |
| iShares Gold Trust |
| GraniteShares Gold Trust |
IShares Gold and GraniteShares Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Gold and GraniteShares Gold
The main advantage of trading using opposite IShares Gold and GraniteShares Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Gold position performs unexpectedly, GraniteShares Gold 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 GraniteShares Gold will offset losses from the drop in GraniteShares Gold's long position.| IShares Gold vs. iShares Silver Trust | IShares Gold vs. VanEck Gold Miners | IShares Gold vs. SPDR Gold Shares | IShares Gold vs. Invesco DB Commodity |
| GraniteShares Gold vs. VanEck Merk Gold | GraniteShares Gold vs. Goldman Sachs Physical | GraniteShares Gold vs. iShares Gold Trust | GraniteShares Gold vs. iShares Bloomberg Roll |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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