Correlation Between International Investors and Global Gold
Can any of the company-specific risk be diversified away by investing in both International Investors and Global 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 International Investors and Global Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between International Investors Gold and Global Gold Fund, you can compare the effects of market volatilities on International Investors and Global 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 International Investors with a short position of Global Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of International Investors and Global Gold.
Diversification Opportunities for International Investors and Global Gold
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between International and Global is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding International Investors Gold and Global Gold Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Gold Fund and International Investors 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 International Investors Gold are associated (or correlated) with Global Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Gold Fund has no effect on the direction of International Investors i.e., International Investors and Global Gold go up and down completely randomly.
Pair Corralation between International Investors and Global Gold
Assuming the 90 days horizon International Investors Gold is expected to under-perform the Global Gold. In addition to that, International Investors is 1.0 times more volatile than Global Gold Fund. It trades about -0.24 of its total potential returns per unit of risk. Global Gold Fund is currently generating about -0.24 per unit of volatility. If you would invest 1,488 in Global Gold Fund on August 30, 2024 and sell it today you would lose (158.00) from holding Global Gold Fund or give up 10.62% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
International Investors Gold vs. Global Gold Fund
Performance |
| Timeline |
| International Investors |
| Global Gold Fund |
International Investors and Global Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with International Investors and Global Gold
The main advantage of trading using opposite International Investors and Global Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if International Investors position performs unexpectedly, Global 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 Global Gold will offset losses from the drop in Global Gold's long position.| International Investors vs. Goldman Sachs Clean | International Investors vs. Gabelli Gold Fund | International Investors vs. Goldman Sachs Centrated | International Investors vs. Precious Metals And |
| Global Gold vs. Gabelli Gold Fund | Global Gold vs. World Precious Minerals | Global Gold vs. Gold And Precious | Global Gold vs. International Investors Gold |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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