Correlation Between Performance Trust and The Gold

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

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

Diversification Opportunities for Performance Trust and The Gold

0.81

Correlation Coefficient

Performance Trust  The Gold

Very poor diversification

The 3 months correlation between Performance and The is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Performance Trust Credit and The Gold Bullion in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gold Bullion and Performance Trust 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 Performance Trust Credit are associated (or correlated) with The 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 Bullion has no effect on the direction of Performance Trust i.e., Performance Trust and The Gold go up and down completely randomly.

Pair Corralation between Performance Trust and The Gold

Assuming the 90 days horizon Performance Trust is expected to generate 7.42 times less return on investment than The Gold. But when comparing it to its historical volatility, Performance Trust Credit is 4.68 times less risky than The Gold. It trades about 0.18 of its potential returns per unit of risk. The Gold Bullion is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest  1,978  in The Gold Bullion on December 21, 2024 and sell it today you would earn a total of  315.00  from holding The Gold Bullion or generate 15.93% return on investment over 90 days.

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

Performance Trust Credit  vs.  The Gold Bullion

Performance Trust Credit

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Performance Trust Credit are ranked lower than 14 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Performance Trust is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Gold Bullion

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in The Gold Bullion are ranked lower than 22 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental indicators, The Gold showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Performance Trust and The Gold

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

The idea behind Performance Trust Credit and The Gold Bullion 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..