Correlation Between Us Global and Gold
Can any of the company-specific risk be diversified away by investing in both Us Global and 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 Us Global and Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Us Global Leaders and Gold And Precious, you can compare the effects of market volatilities on Us Global and 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 Us Global with a short position of Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Us Global and Gold.
Diversification Opportunities for Us Global and Gold
Good diversification
The 3 months correlation between USGLX and Gold is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Us Global Leaders and Gold And Precious in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gold And Precious and Us Global 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 Us Global Leaders are associated (or correlated) with Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gold And Precious has no effect on the direction of Us Global i.e., Us Global and Gold go up and down completely randomly.
Pair Corralation between Us Global and Gold
Assuming the 90 days horizon Us Global is expected to generate 1.29 times less return on investment than Gold. But when comparing it to its historical volatility, Us Global Leaders is 2.15 times less risky than Gold. It trades about 0.14 of its potential returns per unit of risk. Gold And Precious is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 885.00 in Gold And Precious on September 1, 2024 and sell it today you would earn a total of 377.00 from holding Gold And Precious or generate 42.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Us Global Leaders vs. Gold And Precious
Performance |
| Timeline |
| Us Global Leaders |
| Gold And Precious |
Us Global and Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Us Global and Gold
The main advantage of trading using opposite Us Global and Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Us Global position performs unexpectedly, 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 Gold will offset losses from the drop in Gold's long position.| Us Global vs. Regional Bank Fund | Us Global vs. Regional Bank Fund | Us Global vs. Multimanager Lifestyle Balanced | Us Global vs. Multimanager Lifestyle Servative |
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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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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