Correlation Between IShares Gold and IShares Silver
Can any of the company-specific risk be diversified away by investing in both IShares Gold and IShares Silver 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 IShares Silver 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 iShares Silver Trust, you can compare the effects of market volatilities on IShares Gold and IShares Silver 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 IShares Silver. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Gold and IShares Silver.
Diversification Opportunities for IShares Gold and IShares Silver
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between IShares and IShares is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding iShares Gold Trust and iShares Silver Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Silver 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 IShares Silver. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Silver Trust has no effect on the direction of IShares Gold i.e., IShares Gold and IShares Silver go up and down completely randomly.
Pair Corralation between IShares Gold and IShares Silver
Considering the 90-day investment horizon IShares Gold is expected to generate 1.04 times less return on investment than IShares Silver. But when comparing it to its historical volatility, iShares Gold Trust is 1.83 times less risky than IShares Silver. It trades about 0.3 of its potential returns per unit of risk. iShares Silver Trust is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 2,652 in iShares Silver Trust on October 20, 2024 and sell it today you would earn a total of 109.00 from holding iShares Silver Trust or generate 4.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares Gold Trust vs. iShares Silver Trust
Performance |
| Timeline |
| iShares Gold Trust |
| iShares Silver Trust |
IShares Gold and IShares Silver Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Gold and IShares Silver
The main advantage of trading using opposite IShares Gold and IShares Silver positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Gold position performs unexpectedly, IShares Silver 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 IShares Silver will offset losses from the drop in IShares Silver'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 |
| IShares Silver vs. SPDR Gold Shares | IShares Silver vs. VanEck Gold Miners | IShares Silver vs. United States Oil | IShares Silver vs. iShares Gold Trust |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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