Correlation Between Vanguard FTSE and SPDR Gold
Can any of the company-specific risk be diversified away by investing in both Vanguard FTSE 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 Vanguard FTSE and SPDR Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanguard FTSE Emerging and SPDR Gold Shares, you can compare the effects of market volatilities on Vanguard FTSE 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 Vanguard FTSE with a short position of SPDR Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard FTSE and SPDR Gold.
Diversification Opportunities for Vanguard FTSE and SPDR Gold
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Vanguard and SPDR is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard FTSE Emerging 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 Vanguard FTSE 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 Vanguard FTSE Emerging 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 Vanguard FTSE i.e., Vanguard FTSE and SPDR Gold go up and down completely randomly.
Pair Corralation between Vanguard FTSE and SPDR Gold
Considering the 90-day investment horizon Vanguard FTSE Emerging is expected to under-perform the SPDR Gold. But the etf apears to be less risky and, when comparing its historical volatility, Vanguard FTSE Emerging is 1.12 times less risky than SPDR Gold. The etf trades about -0.02 of its potential returns per unit of risk. The SPDR Gold Shares is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 25,247 in SPDR Gold Shares on November 1, 2024 and sell it today you would earn a total of 558.00 from holding SPDR Gold Shares or generate 2.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vanguard FTSE Emerging vs. SPDR Gold Shares
Performance |
| Timeline |
| Vanguard FTSE Emerging |
| SPDR Gold Shares |
Vanguard FTSE and SPDR Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard FTSE and SPDR Gold
The main advantage of trading using opposite Vanguard FTSE and SPDR Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard FTSE 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.| Vanguard FTSE vs. Vanguard FTSE Developed | Vanguard FTSE vs. Vanguard Real Estate | Vanguard FTSE vs. Vanguard Small Cap Index | Vanguard FTSE vs. Vanguard Total Stock |
| 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
Other Complementary Tools
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Equity Valuation Check real value of public entities based on technical and fundamental data |