Correlation Between Quantified Evolution and Gold Bullion

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

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

Diversification Opportunities for Quantified Evolution and Gold Bullion

0.94

Correlation Coefficient

Quantified Evolution  Gold Bullion

Almost no diversification

The 3 months correlation between Quantified and Gold is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Quantified Evolution Plus and The Gold Bullion in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gold Bullion and Quantified Evolution 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 Quantified Evolution Plus are associated (or correlated) with Gold Bullion. 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 Quantified Evolution i.e., Quantified Evolution and Gold Bullion go up and down completely randomly.

Pair Corralation between Quantified Evolution and Gold Bullion

Assuming the 90 days horizon Quantified Evolution Plus is expected to generate 0.64 times more return on investment than Gold Bullion. However, Quantified Evolution Plus is 1.56 times less risky than Gold Bullion. It trades about -0.08 of its potential returns per unit of risk. The Gold Bullion is currently generating about -0.12 per unit of risk. If you would invest  681.00  in Quantified Evolution Plus on October 9, 2024 and sell it today you would lose (64.00) from holding Quantified Evolution Plus or give up 9.4% of portfolio value over 90 days.

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

Quantified Evolution Plus  vs.  The Gold Bullion

Quantified Evolution Plus

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Quantified Evolution Plus has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Gold Bullion

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days The Gold Bullion has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's fundamental indicators remain fairly strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Pair Trading with Quantified Evolution and Gold Bullion

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

The idea behind Quantified Evolution Plus 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.