Correlation Between NYSE Composite and US Gold
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and US 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 NYSE Composite and US Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and US Gold Corp, you can compare the effects of market volatilities on NYSE Composite and US 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 NYSE Composite with a short position of US Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and US Gold.
Diversification Opportunities for NYSE Composite and US Gold
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between NYSE and USAU is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and US Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on US Gold Corp and NYSE Composite 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 NYSE Composite are associated (or correlated) with US Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of US Gold Corp has no effect on the direction of NYSE Composite i.e., NYSE Composite and US Gold go up and down completely randomly.
Pair Corralation between NYSE Composite and US Gold
Assuming the 90 days trading horizon NYSE Composite is expected to generate 3.41 times less return on investment than US Gold. But when comparing it to its historical volatility, NYSE Composite is 5.3 times less risky than US Gold. It trades about 0.13 of its potential returns per unit of risk. US Gold Corp is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 591.00 in US Gold Corp on August 25, 2024 and sell it today you would earn a total of 210.00 from holding US Gold Corp or generate 35.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. US Gold Corp
Performance |
| Timeline |
NYSE Composite and US Gold Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
US Gold Corp
Pair trading matchups for US Gold
Pair Trading with NYSE Composite and US Gold
The main advantage of trading using opposite NYSE Composite and US Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, US 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 US Gold will offset losses from the drop in US Gold's long position.| NYSE Composite vs. Glacier Bancorp | NYSE Composite vs. LithiumBank Resources Corp | NYSE Composite vs. Stepstone Group | NYSE Composite vs. Pintec Technology Holdings |
| US Gold vs. Labrador Gold Corp | US Gold vs. Aurion Resources | US Gold vs. Puma Exploration | US Gold vs. Golden Star Resource |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
Other Complementary Tools
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume |