Correlation Between Abrdn Physical and GraniteShares Gold

Can any of the company-specific risk be diversified away by investing in both Abrdn Physical 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 Physical 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 Physical Palladium and GraniteShares Gold Trust, you can compare the effects of market volatilities on Abrdn Physical 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 Physical with a short position of GraniteShares Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Abrdn Physical and GraniteShares Gold.

Diversification Opportunities for Abrdn Physical and GraniteShares Gold

0.66

Correlation Coefficient

Abrdn Physical  GraniteShares Gold

Poor diversification

The 3 months correlation between Abrdn and GraniteShares is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding abrdn Physical Palladium 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 Physical 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 Physical Palladium 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 Physical i.e., Abrdn Physical and GraniteShares Gold go up and down completely randomly.

Pair Corralation between Abrdn Physical and GraniteShares Gold

Given the investment horizon of 90 days abrdn Physical Palladium is expected to generate 1.95 times more return on investment than GraniteShares Gold. However, Abrdn Physical is 1.95 times more volatile than GraniteShares Gold Trust. It trades about 0.24 of its potential returns per unit of risk. GraniteShares Gold Trust is currently generating about 0.33 per unit of risk. 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

abrdn Physical Palladium  vs.  GraniteShares Gold Trust

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.

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.

Pair Trading with Abrdn Physical and GraniteShares Gold

The main advantage of trading using opposite Abrdn Physical and GraniteShares Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Abrdn Physical 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 Physical Palladium 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.