Correlation Between Barclays Capital and GraniteShares Gold

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

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

Diversification Opportunities for Barclays Capital and GraniteShares Gold

0.33

Correlation Coefficient

Barclays Capital  GraniteShares Gold

Weak diversification

The 3 months correlation between Barclays and GraniteShares is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Barclays Capital 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 Barclays Capital 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 Barclays Capital 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 Barclays Capital i.e., Barclays Capital and GraniteShares Gold go up and down completely randomly.

Pair Corralation between Barclays Capital and GraniteShares Gold

Considering the 90-day investment horizon Barclays Capital is expected to generate 1.31 times less return on investment than GraniteShares Gold. In addition to that, Barclays Capital is 1.77 times more volatile than GraniteShares Gold Trust. It trades about 0.04 of its total potential returns per unit of risk. GraniteShares Gold Trust is currently generating about 0.09 per unit of volatility. If you would invest  1,850  in GraniteShares Gold Trust on October 27, 2024 and sell it today you would earn a total of  868.00  from holding GraniteShares Gold Trust or generate 46.92% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	23.48%
Values	Daily Returns

Barclays Capital  vs.  GraniteShares Gold Trust

Barclays Capital

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Barclays Capital has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy technical and fundamental indicators, Barclays Capital is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the 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 Barclays Capital and GraniteShares Gold

The main advantage of trading using opposite Barclays Capital and GraniteShares Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barclays Capital 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 Barclays Capital 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.

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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.