Correlation Between Global X and VanEck Gold
Can any of the company-specific risk be diversified away by investing in both Global X and VanEck 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 Global X and VanEck Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global X Silver and VanEck Gold Miners, you can compare the effects of market volatilities on Global X and VanEck 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 Global X with a short position of VanEck Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global X and VanEck Gold.
Diversification Opportunities for Global X and VanEck Gold
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Global and VanEck is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Global X Silver and VanEck Gold Miners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VanEck Gold Miners and Global X 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 Global X Silver are associated (or correlated) with VanEck Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VanEck Gold Miners has no effect on the direction of Global X i.e., Global X and VanEck Gold go up and down completely randomly.
Pair Corralation between Global X and VanEck Gold
Considering the 90-day investment horizon Global X Silver is expected to under-perform the VanEck Gold. But the etf apears to be less risky and, when comparing its historical volatility, Global X Silver is 1.12 times less risky than VanEck Gold. The etf trades about -0.25 of its potential returns per unit of risk. The VanEck Gold Miners is currently generating about -0.2 of returns per unit of risk over similar time horizon. If you would invest 4,151 in VanEck Gold Miners on August 31, 2024 and sell it today you would lose (406.00) from holding VanEck Gold Miners or give up 9.78% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global X Silver vs. VanEck Gold Miners
Performance |
| Timeline |
| Global X Silver |
| VanEck Gold Miners |
Global X and VanEck Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global X and VanEck Gold
The main advantage of trading using opposite Global X and VanEck Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global X position performs unexpectedly, VanEck 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 VanEck Gold will offset losses from the drop in VanEck Gold's long position.| Global X vs. VanEck Gold Miners | Global X vs. Amplify ETF Trust | Global X vs. Pan American Silver | Global X vs. Franco Nevada |
| VanEck Gold vs. VanEck Junior Gold | VanEck Gold vs. iShares Silver Trust | VanEck Gold vs. SPDR Gold Shares | VanEck Gold vs. Newmont Goldcorp 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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