Correlation Between Midas Fund and Gold

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

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

Diversification Opportunities for Midas Fund and Gold

0.99

Correlation Coefficient

Midas Fund  Gold

No risk reduction

The 3 months correlation between Midas and Gold is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Midas Fund Midas and Gold And Precious in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gold And Precious and Midas Fund 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 Midas Fund Midas are associated (or correlated) with Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gold And Precious has no effect on the direction of Midas Fund i.e., Midas Fund and Gold go up and down completely randomly.

Pair Corralation between Midas Fund and Gold

Assuming the 90 days horizon Midas Fund Midas is expected to generate 0.92 times more return on investment than Gold. However, Midas Fund Midas is 1.09 times less risky than Gold. It trades about 0.07 of its potential returns per unit of risk. Gold And Precious is currently generating about 0.02 per unit of risk. If you would invest  140.00  in Midas Fund Midas on December 4, 2024 and sell it today you would earn a total of  3.00  from holding Midas Fund Midas or generate 2.14% return on investment over 90 days.

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

Midas Fund Midas  vs.  Gold And Precious

Midas Fund Midas

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Midas Fund Midas are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Midas Fund may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Gold And Precious

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Gold And Precious are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Gold is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Midas Fund and Gold

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

The idea behind Midas Fund Midas and Gold And Precious 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.