Correlation Between BetaPro Gold and BetaPro Silver

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

By analyzing existing cross correlation between BetaPro Gold Bullion and BetaPro Silver 2x, you can compare the effects of market volatilities on BetaPro Gold and BetaPro Silver 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 BetaPro Gold with a short position of BetaPro Silver. Check out your portfolio center. Please also check ongoing floating volatility patterns of BetaPro Gold and BetaPro Silver.

Diversification Opportunities for BetaPro Gold and BetaPro Silver

0.96

Correlation Coefficient

BetaPro Gold  BetaPro Silver

Almost no diversification

The 3 months correlation between BetaPro and BetaPro is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding BetaPro Gold Bullion and BetaPro Silver 2x in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BetaPro Silver 2x and BetaPro 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 BetaPro Gold Bullion are associated (or correlated) with BetaPro Silver. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BetaPro Silver 2x has no effect on the direction of BetaPro Gold i.e., BetaPro Gold and BetaPro Silver go up and down completely randomly.

Pair Corralation between BetaPro Gold and BetaPro Silver

Assuming the 90 days trading horizon BetaPro Gold Bullion is expected to generate 0.61 times more return on investment than BetaPro Silver. However, BetaPro Gold Bullion is 1.63 times less risky than BetaPro Silver. It trades about -0.26 of its potential returns per unit of risk. BetaPro Silver 2x is currently generating about -0.19 per unit of risk. If you would invest  2,689  in BetaPro Gold Bullion on December 30, 2024 and sell it today you would lose (716.00) from holding BetaPro Gold Bullion or give up 26.63% of portfolio value over 90 days.

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

BetaPro Gold Bullion  vs.  BetaPro Silver 2x

BetaPro Gold Bullion

Risk-Adjusted Performance

Very Weak

Over the last 90 days BetaPro Gold Bullion has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Etf's fundamental indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the ETF investors.

BetaPro Silver 2x

Risk-Adjusted Performance

Very Weak

Over the last 90 days BetaPro Silver 2x has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Etf's fundamental indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the ETF investors.

Pair Trading with BetaPro Gold and BetaPro Silver

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

The idea behind BetaPro Gold Bullion and BetaPro Silver 2x 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.