Correlation Between Global Gold and Lsv Global

Can any of the company-specific risk be diversified away by investing in both Global Gold and Lsv Global 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 Global Gold and Lsv Global into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Global Gold Fund and Lsv Global Managed, you can compare the effects of market volatilities on Global Gold and Lsv Global 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 Global Gold with a short position of Lsv Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Gold and Lsv Global.

Diversification Opportunities for Global Gold and Lsv Global

-0.04

Correlation Coefficient

Global Gold  Lsv Global

Good diversification

The 3 months correlation between Global and Lsv is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Global Gold Fund and Lsv Global Managed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lsv Global Managed and Global 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 Global Gold Fund are associated (or correlated) with Lsv Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lsv Global Managed has no effect on the direction of Global Gold i.e., Global Gold and Lsv Global go up and down completely randomly.

Pair Corralation between Global Gold and Lsv Global

Assuming the 90 days horizon Global Gold Fund is expected to generate 1.11 times more return on investment than Lsv Global. However, Global Gold is 1.11 times more volatile than Lsv Global Managed. It trades about 0.07 of its potential returns per unit of risk. Lsv Global Managed is currently generating about -0.1 per unit of risk. If you would invest  1,276  in Global Gold Fund on December 4, 2024 and sell it today you would earn a total of  85.00  from holding Global Gold Fund or generate 6.66% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Global Gold Fund  vs.  Lsv Global Managed

Global Gold Fund

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Global Gold Fund are ranked lower than 5 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Global Gold may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Lsv Global Managed

Risk-Adjusted Performance

Very Weak

Over the last 90 days Lsv Global Managed has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's technical and fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with Global Gold and Lsv Global

The main advantage of trading using opposite Global Gold and Lsv Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Gold position performs unexpectedly, Lsv Global 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 Lsv Global will offset losses from the drop in Lsv Global's long position.

The idea behind Global Gold Fund and Lsv Global Managed 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.

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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 Money Managers module to screen money managers from public funds and ETFs managed around the world.