Correlation Between USCF Gold and SPDR Gold
Can any of the company-specific risk be diversified away by investing in both USCF Gold 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 USCF Gold and SPDR Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between USCF Gold Strategy and SPDR Gold Shares, you can compare the effects of market volatilities on USCF Gold 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 USCF Gold with a short position of SPDR Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of USCF Gold and SPDR Gold.
Diversification Opportunities for USCF Gold and SPDR Gold
No risk reduction
The 3 months correlation between USCF and SPDR is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding USCF Gold Strategy 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 USCF Gold 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 USCF Gold Strategy 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 USCF Gold i.e., USCF Gold and SPDR Gold go up and down completely randomly.
Pair Corralation between USCF Gold and SPDR Gold
Considering the 90-day investment horizon USCF Gold Strategy is expected to generate 0.99 times more return on investment than SPDR Gold. However, USCF Gold Strategy is 1.01 times less risky than SPDR Gold. It trades about 0.23 of its potential returns per unit of risk. SPDR Gold Shares is currently generating about 0.21 per unit of risk. If you would invest 2,919 in USCF Gold Strategy on September 13, 2024 and sell it today you would earn a total of 147.00 from holding USCF Gold Strategy or generate 5.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
USCF Gold Strategy vs. SPDR Gold Shares
Performance |
| Timeline |
| USCF Gold Strategy |
| SPDR Gold Shares |
USCF Gold and SPDR Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with USCF Gold and SPDR Gold
The main advantage of trading using opposite USCF Gold and SPDR Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if USCF Gold 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.| USCF Gold vs. First Trust Exchange Traded | USCF Gold vs. Invesco NASDAQ 100 | USCF Gold vs. Direxion Shares ETF | USCF Gold vs. iShares Global Tech |
| 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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