Correlation Between IShares Physical and GoldMining
Can any of the company-specific risk be diversified away by investing in both IShares Physical and GoldMining 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 Physical and GoldMining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Physical Silver and GoldMining, you can compare the effects of market volatilities on IShares Physical and GoldMining 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 Physical with a short position of GoldMining. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Physical and GoldMining.
Diversification Opportunities for IShares Physical and GoldMining
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between IShares and GoldMining is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding iShares Physical Silver and GoldMining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GoldMining and IShares Physical 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 Physical Silver are associated (or correlated) with GoldMining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GoldMining has no effect on the direction of IShares Physical i.e., IShares Physical and GoldMining go up and down completely randomly.
Pair Corralation between IShares Physical and GoldMining
Assuming the 90 days trading horizon IShares Physical is expected to generate 2.69 times less return on investment than GoldMining. But when comparing it to its historical volatility, iShares Physical Silver is 1.63 times less risky than GoldMining. It trades about 0.03 of its potential returns per unit of risk. GoldMining is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 113.00 in GoldMining on August 28, 2024 and sell it today you would earn a total of 6.00 from holding GoldMining or generate 5.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 67.69% |
| Values | Daily Returns |
iShares Physical Silver vs. GoldMining
Performance |
| Timeline |
| iShares Physical Silver |
| GoldMining |
IShares Physical and GoldMining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Physical and GoldMining
The main advantage of trading using opposite IShares Physical and GoldMining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Physical position performs unexpectedly, GoldMining 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 GoldMining will offset losses from the drop in GoldMining's long position.| IShares Physical vs. Schroders Investment Trusts | IShares Physical vs. Tatton Asset Management | IShares Physical vs. Electronic Arts | IShares Physical vs. Compal Electronics GDR |
| GoldMining vs. Samsung Electronics Co | GoldMining vs. Samsung Electronics Co | GoldMining vs. Hyundai Motor | GoldMining vs. Toyota Motor Corp |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
Other Complementary Tools
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated |