Correlation Between Chia and SPDR Gold
Can any of the company-specific risk be diversified away by investing in both Chia 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 Chia and SPDR Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chia and SPDR Gold Shares, you can compare the effects of market volatilities on Chia 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 Chia with a short position of SPDR Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chia and SPDR Gold.
Diversification Opportunities for Chia and SPDR Gold
Significant diversification
The 3 months correlation between Chia and SPDR is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Chia 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 Chia 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 Chia 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 Chia i.e., Chia and SPDR Gold go up and down completely randomly.
Pair Corralation between Chia and SPDR Gold
Assuming the 90 days trading horizon Chia is expected to under-perform the SPDR Gold. In addition to that, Chia is 7.57 times more volatile than SPDR Gold Shares. It trades about -0.01 of its total potential returns per unit of risk. SPDR Gold Shares is currently generating about 0.16 per unit of volatility. If you would invest 17,370 in SPDR Gold Shares on November 2, 2024 and sell it today you would earn a total of 7,442 from holding SPDR Gold Shares or generate 42.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 74.39% |
| Values | Daily Returns |
Chia vs. SPDR Gold Shares
Performance |
| Timeline |
| Chia |
| SPDR Gold Shares |
Chia and SPDR Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chia and SPDR Gold
The main advantage of trading using opposite Chia and SPDR Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chia 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.The idea behind Chia and SPDR Gold Shares pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| SPDR Gold vs. SPDR Barclays 10 | SPDR Gold vs. SPDR ICE BofA | SPDR Gold vs. SPDR SP Utilities | SPDR Gold vs. SPDR ICE BofA |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
Other Complementary Tools
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk |