Correlation Between Abrdn ETFs and GraniteShares Gold

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

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

Diversification Opportunities for Abrdn ETFs and GraniteShares Gold

0.48

Correlation Coefficient

Abrdn ETFs  GraniteShares Gold

Very weak diversification

The 3 months correlation between Abrdn and GraniteShares is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding abrdn ETFs and GraniteShares Gold Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GraniteShares Gold Trust and Abrdn ETFs 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 abrdn ETFs are associated (or correlated) with GraniteShares Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GraniteShares Gold Trust has no effect on the direction of Abrdn ETFs i.e., Abrdn ETFs and GraniteShares Gold go up and down completely randomly.

Pair Corralation between Abrdn ETFs and GraniteShares Gold

Given the investment horizon of 90 days abrdn ETFs is expected to under-perform the GraniteShares Gold. But the etf apears to be less risky and, when comparing its historical volatility, abrdn ETFs is 1.47 times less risky than GraniteShares Gold. The etf trades about -0.3 of its potential returns per unit of risk. The GraniteShares Gold Trust is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest  2,624  in GraniteShares Gold Trust on October 10, 2024 and sell it today you would lose (9.00) from holding GraniteShares Gold Trust or give up 0.34% of portfolio value over 90 days.

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

abrdn ETFs   vs.  GraniteShares Gold Trust

abrdn ETFs

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days abrdn ETFs has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Etf's forward indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the ETF investors.

GraniteShares Gold Trust

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in GraniteShares Gold Trust are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. 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.

Pair Trading with Abrdn ETFs and GraniteShares Gold

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

The idea behind abrdn ETFs and GraniteShares Gold Trust 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.