Correlation Between Silver Bullion and Global X
Can any of the company-specific risk be diversified away by investing in both Silver Bullion and Global X 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 Silver Bullion and Global X into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Silver Bullion Trust and Global X Silver, you can compare the effects of market volatilities on Silver Bullion and Global X 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 Silver Bullion with a short position of Global X. Check out your portfolio center. Please also check ongoing floating volatility patterns of Silver Bullion and Global X.
Diversification Opportunities for Silver Bullion and Global X
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Silver and Global is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Silver Bullion Trust and Global X Silver in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global X Silver and Silver Bullion 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 Silver Bullion Trust are associated (or correlated) with Global X. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global X Silver has no effect on the direction of Silver Bullion i.e., Silver Bullion and Global X go up and down completely randomly.
Pair Corralation between Silver Bullion and Global X
Assuming the 90 days trading horizon Silver Bullion is expected to generate 1.54 times less return on investment than Global X. But when comparing it to its historical volatility, Silver Bullion Trust is 1.24 times less risky than Global X. It trades about 0.11 of its potential returns per unit of risk. Global X Silver is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 1,321 in Global X Silver on October 25, 2024 and sell it today you would earn a total of 54.00 from holding Global X Silver or generate 4.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Silver Bullion Trust vs. Global X Silver
Performance |
| Timeline |
| Silver Bullion Trust |
| Global X Silver |
Silver Bullion and Global X Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Silver Bullion and Global X
The main advantage of trading using opposite Silver Bullion and Global X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Silver Bullion position performs unexpectedly, Global X 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 X will offset losses from the drop in Global X's long position.| Silver Bullion vs. Purpose Gold Bullion | Silver Bullion vs. iShares Silver Bullion | Silver Bullion vs. Purpose Diversified Real | Silver Bullion vs. Purpose Premium Yield |
| Global X vs. Global X Gold | Global X vs. Global X Natural | Global X vs. iShares Silver Bullion | Global X vs. BetaPro Silver 2x |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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