Correlation Between GraniteShares Gold and Abrdn Physical

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

By analyzing existing cross correlation between GraniteShares Gold Trust and abrdn Physical Palladium, you can compare the effects of market volatilities on GraniteShares Gold and Abrdn Physical 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 GraniteShares Gold with a short position of Abrdn Physical. Check out your portfolio center. Please also check ongoing floating volatility patterns of GraniteShares Gold and Abrdn Physical.

Diversification Opportunities for GraniteShares Gold and Abrdn Physical

0.66

Correlation Coefficient

GraniteShares Gold  Abrdn Physical

Poor diversification

The 3 months correlation between GraniteShares and Abrdn is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding GraniteShares Gold Trust and abrdn Physical Palladium in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on abrdn Physical Palladium and GraniteShares 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 GraniteShares Gold Trust are associated (or correlated) with Abrdn Physical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of abrdn Physical Palladium has no effect on the direction of GraniteShares Gold i.e., GraniteShares Gold and Abrdn Physical go up and down completely randomly.

Pair Corralation between GraniteShares Gold and Abrdn Physical

Considering the 90-day investment horizon GraniteShares Gold is expected to generate 1.4 times less return on investment than Abrdn Physical. But when comparing it to its historical volatility, GraniteShares Gold Trust is 1.95 times less risky than Abrdn Physical. It trades about 0.33 of its potential returns per unit of risk. abrdn Physical Palladium is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest  8,495  in abrdn Physical Palladium on October 27, 2024 and sell it today you would earn a total of  533.00  from holding abrdn Physical Palladium or generate 6.27% return on investment over 90 days.

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

GraniteShares Gold Trust  vs.  abrdn Physical Palladium

GraniteShares Gold Trust

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days GraniteShares Gold Trust has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, GraniteShares Gold is not utilizing all of its potentials. The recent stock price agitation, may contribute to short-term losses for the retail investors.

abrdn Physical Palladium

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days abrdn Physical Palladium has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Etf's essential indicators remain quite persistent which may send shares a bit higher in February 2025. The latest mess may also be a sign of long-standing up-swing for the ETF venture institutional investors.

Pair Trading with GraniteShares Gold and Abrdn Physical

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

The idea behind GraniteShares Gold Trust and abrdn Physical Palladium 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.