Correlation Between SPDR Gold and Teucrium Corn
Can any of the company-specific risk be diversified away by investing in both SPDR Gold and Teucrium Corn 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 SPDR Gold and Teucrium Corn into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPDR Gold Shares and Teucrium Corn, you can compare the effects of market volatilities on SPDR Gold and Teucrium Corn 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 SPDR Gold with a short position of Teucrium Corn. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR Gold and Teucrium Corn.
Diversification Opportunities for SPDR Gold and Teucrium Corn
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SPDR and Teucrium is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding SPDR Gold Shares and Teucrium Corn in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Teucrium Corn and SPDR 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 SPDR Gold Shares are associated (or correlated) with Teucrium Corn. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Teucrium Corn has no effect on the direction of SPDR Gold i.e., SPDR Gold and Teucrium Corn go up and down completely randomly.
Pair Corralation between SPDR Gold and Teucrium Corn
Considering the 90-day investment horizon SPDR Gold Shares is expected to generate 0.99 times more return on investment than Teucrium Corn. However, SPDR Gold Shares is 1.01 times less risky than Teucrium Corn. It trades about 0.13 of its potential returns per unit of risk. Teucrium Corn is currently generating about -0.06 per unit of risk. If you would invest 16,965 in SPDR Gold Shares on September 26, 2024 and sell it today you would earn a total of 7,179 from holding SPDR Gold Shares or generate 42.32% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
SPDR Gold Shares vs. Teucrium Corn
Performance |
Timeline |
SPDR Gold Shares |
Teucrium Corn |
SPDR Gold and Teucrium Corn Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with SPDR Gold and Teucrium Corn
The main advantage of trading using opposite SPDR Gold and Teucrium Corn positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR Gold position performs unexpectedly, Teucrium Corn 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 Teucrium Corn will offset losses from the drop in Teucrium Corn's long position.SPDR Gold vs. iShares Silver Trust | SPDR Gold vs. VanEck Gold Miners | SPDR Gold vs. SPDR SP 500 | SPDR Gold vs. United States Oil |
Teucrium Corn vs. Sprott Physical Silver | Teucrium Corn vs. Blue Owl Capital | Teucrium Corn vs. Ares Management LP | Teucrium Corn vs. Sprott Physical Gold |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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