Correlation Between CI Gold and Purpose Gold
Can any of the company-specific risk be diversified away by investing in both CI Gold and Purpose 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 CI Gold and Purpose Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CI Gold Bullion and Purpose Gold Bullion, you can compare the effects of market volatilities on CI Gold and Purpose 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 CI Gold with a short position of Purpose Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of CI Gold and Purpose Gold.
Diversification Opportunities for CI Gold and Purpose Gold
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between VALT and Purpose is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding CI Gold Bullion and Purpose Gold Bullion in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Purpose Gold Bullion and CI 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 CI Gold Bullion are associated (or correlated) with Purpose Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Purpose Gold Bullion has no effect on the direction of CI Gold i.e., CI Gold and Purpose Gold go up and down completely randomly.
Pair Corralation between CI Gold and Purpose Gold
Assuming the 90 days trading horizon CI Gold Bullion is expected to generate 1.07 times more return on investment than Purpose Gold. However, CI Gold is 1.07 times more volatile than Purpose Gold Bullion. It trades about 0.04 of its potential returns per unit of risk. Purpose Gold Bullion is currently generating about -0.02 per unit of risk. If you would invest 3,357 in CI Gold Bullion on October 23, 2024 and sell it today you would earn a total of 41.00 from holding CI Gold Bullion or generate 1.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
CI Gold Bullion vs. Purpose Gold Bullion
Performance |
| Timeline |
| CI Gold Bullion |
| Purpose Gold Bullion |
CI Gold and Purpose Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CI Gold and Purpose Gold
The main advantage of trading using opposite CI Gold and Purpose Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CI Gold position performs unexpectedly, Purpose 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 Purpose Gold will offset losses from the drop in Purpose Gold's long position.| CI Gold vs. iShares Silver Bullion | CI Gold vs. iShares Gold Bullion | CI Gold vs. Global X Silver | CI Gold vs. iShares Gold Bullion |
| Purpose Gold vs. Royal Canadian Mint | Purpose Gold vs. iShares Gold Bullion | Purpose Gold vs. Global X Gold | Purpose Gold vs. Purpose Gold Bullion |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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