Correlation Between Global X and USCF Gold
Can any of the company-specific risk be diversified away by investing in both Global X and USCF 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 USCF 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 USCF Gold Strategy, you can compare the effects of market volatilities on Global X and USCF 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 USCF Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global X and USCF Gold.
Diversification Opportunities for Global X and USCF Gold
Almost no diversification
The 3 months correlation between Global and USCF is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Global X Silver and USCF Gold Strategy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on USCF Gold Strategy 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 USCF Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of USCF Gold Strategy has no effect on the direction of Global X i.e., Global X and USCF Gold go up and down completely randomly.
Pair Corralation between Global X and USCF Gold
Considering the 90-day investment horizon Global X is expected to generate 1.43 times less return on investment than USCF Gold. In addition to that, Global X is 2.5 times more volatile than USCF Gold Strategy. It trades about 0.03 of its total potential returns per unit of risk. USCF Gold Strategy is currently generating about 0.12 per unit of volatility. If you would invest 2,612 in USCF Gold Strategy on September 1, 2024 and sell it today you would earn a total of 374.00 from holding USCF Gold Strategy or generate 14.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global X Silver vs. USCF Gold Strategy
Performance |
| Timeline |
| Global X Silver |
| USCF Gold Strategy |
Global X and USCF Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global X and USCF Gold
The main advantage of trading using opposite Global X and USCF Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global X position performs unexpectedly, USCF 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 USCF Gold will offset losses from the drop in USCF Gold's long position.| Global X vs. Amplify ETF Trust | Global X vs. VanEck Junior Gold | Global X vs. Pan American Silver | Global X vs. Coeur Mining |
| USCF Gold vs. VictoryShares Small Cap | USCF Gold vs. SPDR Gold Shares | USCF Gold vs. First Trust Equity | USCF Gold vs. SPDR Nuveen Municipal |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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