Correlation Between The Gold and Lgm Risk
Can any of the company-specific risk be diversified away by investing in both The Gold and Lgm Risk 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 The Gold and Lgm Risk into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Gold Bullion and Lgm Risk Managed, you can compare the effects of market volatilities on The Gold and Lgm Risk 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 The Gold with a short position of Lgm Risk. Check out your portfolio center. Please also check ongoing floating volatility patterns of The Gold and Lgm Risk.
Diversification Opportunities for The Gold and Lgm Risk
Modest diversification
The 3 months correlation between The and Lgm is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding The Gold Bullion and Lgm Risk Managed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lgm Risk Managed and The 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 The Gold Bullion are associated (or correlated) with Lgm Risk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lgm Risk Managed has no effect on the direction of The Gold i.e., The Gold and Lgm Risk go up and down completely randomly.
Pair Corralation between The Gold and Lgm Risk
Assuming the 90 days horizon The Gold Bullion is expected to under-perform the Lgm Risk. In addition to that, The Gold is 11.95 times more volatile than Lgm Risk Managed. It trades about -0.24 of its total potential returns per unit of risk. Lgm Risk Managed is currently generating about -0.25 per unit of volatility. If you would invest 1,152 in Lgm Risk Managed on October 13, 2024 and sell it today you would lose (22.00) from holding Lgm Risk Managed or give up 1.91% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Gold Bullion vs. Lgm Risk Managed
Performance |
| Timeline |
| Gold Bullion |
| Lgm Risk Managed |
The Gold and Lgm Risk Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with The Gold and Lgm Risk
The main advantage of trading using opposite The Gold and Lgm Risk positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if The Gold position performs unexpectedly, Lgm Risk 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 Lgm Risk will offset losses from the drop in Lgm Risk's long position.| The Gold vs. Jhancock Diversified Macro | The Gold vs. Fulcrum Diversified Absolute | The Gold vs. Tiaa Cref Small Cap Equity | The Gold vs. Stone Ridge Diversified |
| Lgm Risk vs. Europac Gold Fund | Lgm Risk vs. The Gold Bullion | Lgm Risk vs. Precious Metals And | Lgm Risk vs. Gamco Global 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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