Correlation Between Abrdn Physical and IShares Gold
Can any of the company-specific risk be diversified away by investing in both Abrdn Physical and IShares 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 Abrdn Physical and IShares Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between abrdn Physical Gold and iShares Gold Trust, you can compare the effects of market volatilities on Abrdn Physical and IShares 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 Abrdn Physical with a short position of IShares Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Abrdn Physical and IShares Gold.
Diversification Opportunities for Abrdn Physical and IShares Gold
1.0 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Abrdn and IShares is 1.0. Overlapping area represents the amount of risk that can be diversified away by holding abrdn Physical Gold and iShares Gold Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Gold Trust and Abrdn 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 abrdn Physical Gold are associated (or correlated) with IShares Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Gold Trust has no effect on the direction of Abrdn Physical i.e., Abrdn Physical and IShares Gold go up and down completely randomly.
Pair Corralation between Abrdn Physical and IShares Gold
Given the investment horizon of 90 days abrdn Physical Gold is expected to generate 0.99 times more return on investment than IShares Gold. However, abrdn Physical Gold is 1.01 times less risky than IShares Gold. It trades about 0.04 of its potential returns per unit of risk. iShares Gold Trust is currently generating about 0.04 per unit of risk. If you would invest 2,541 in abrdn Physical Gold on August 26, 2024 and sell it today you would earn a total of 43.00 from holding abrdn Physical Gold or generate 1.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
abrdn Physical Gold vs. iShares Gold Trust
Performance |
| Timeline |
| abrdn Physical Gold |
| iShares Gold Trust |
Abrdn Physical and IShares Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Abrdn Physical and IShares Gold
The main advantage of trading using opposite Abrdn Physical and IShares Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Abrdn Physical position performs unexpectedly, IShares 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 IShares Gold will offset losses from the drop in IShares Gold's long position.| Abrdn Physical vs. abrdn Physical Silver | Abrdn Physical vs. GraniteShares Gold Trust | Abrdn Physical vs. SPDR Gold MiniShares | Abrdn Physical vs. abrdn Physical Platinum |
| IShares Gold vs. iShares Silver Trust | IShares Gold vs. VanEck Gold Miners | IShares Gold vs. SPDR Gold Shares | IShares Gold vs. Invesco DB Commodity |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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