Correlation Between IShares Silver and VanEck Gold
Can any of the company-specific risk be diversified away by investing in both IShares Silver 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 IShares Silver and VanEck Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Silver Trust and VanEck Gold Miners, you can compare the effects of market volatilities on IShares Silver 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 IShares Silver with a short position of VanEck Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Silver and VanEck Gold.
Diversification Opportunities for IShares Silver and VanEck Gold
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between IShares and VanEck is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding iShares Silver Trust 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 IShares Silver 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 iShares Silver Trust 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 IShares Silver i.e., IShares Silver and VanEck Gold go up and down completely randomly.
Pair Corralation between IShares Silver and VanEck Gold
Considering the 90-day investment horizon IShares Silver is expected to generate 1.07 times less return on investment than VanEck Gold. But when comparing it to its historical volatility, iShares Silver Trust is 1.03 times less risky than VanEck Gold. It trades about 0.05 of its potential returns per unit of risk. VanEck Gold Miners is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 3,072 in VanEck Gold Miners on August 24, 2024 and sell it today you would earn a total of 742.00 from holding VanEck Gold Miners or generate 24.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares Silver Trust vs. VanEck Gold Miners
Performance |
| Timeline |
| iShares Silver Trust |
| VanEck Gold Miners |
IShares Silver and VanEck Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Silver and VanEck Gold
The main advantage of trading using opposite IShares Silver and VanEck Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Silver 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.| IShares Silver vs. SPDR Gold Shares | IShares Silver vs. VanEck Gold Miners | IShares Silver vs. United States Oil | IShares Silver vs. iShares Gold Trust |
| 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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