Correlation Between Teucrium Soybean and SPDR Gold
Can any of the company-specific risk be diversified away by investing in both Teucrium Soybean and SPDR 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 Teucrium Soybean and SPDR Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Teucrium Soybean and SPDR Gold Shares, you can compare the effects of market volatilities on Teucrium Soybean and SPDR 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 Teucrium Soybean with a short position of SPDR Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Teucrium Soybean and SPDR Gold.
Diversification Opportunities for Teucrium Soybean and SPDR Gold
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Teucrium and SPDR is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Teucrium Soybean and SPDR Gold Shares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR Gold Shares and Teucrium Soybean 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 Teucrium Soybean are associated (or correlated) with SPDR Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR Gold Shares has no effect on the direction of Teucrium Soybean i.e., Teucrium Soybean and SPDR Gold go up and down completely randomly.
Pair Corralation between Teucrium Soybean and SPDR Gold
Given the investment horizon of 90 days Teucrium Soybean is expected to under-perform the SPDR Gold. But the etf apears to be less risky and, when comparing its historical volatility, Teucrium Soybean is 1.6 times less risky than SPDR Gold. The etf trades about -0.16 of its potential returns per unit of risk. The SPDR Gold Shares is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 24,005 in SPDR Gold Shares on September 13, 2024 and sell it today you would earn a total of 1,091 from holding SPDR Gold Shares or generate 4.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Teucrium Soybean vs. SPDR Gold Shares
Performance |
| Timeline |
| Teucrium Soybean |
| SPDR Gold Shares |
Teucrium Soybean and SPDR Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Teucrium Soybean and SPDR Gold
The main advantage of trading using opposite Teucrium Soybean and SPDR Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Teucrium Soybean position performs unexpectedly, SPDR 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 SPDR Gold will offset losses from the drop in SPDR Gold's long position.| Teucrium Soybean vs. Teucrium Corn | Teucrium Soybean vs. Teucrium Wheat | Teucrium Soybean vs. Teucrium Sugar |
| SPDR Gold vs. iShares Silver Trust | SPDR Gold vs. VanEck Gold Miners | SPDR Gold vs. SPDR SP 500 | SPDR Gold vs. United States Oil |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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