Correlation Between Quantified Stf and The Gold

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

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

Diversification Opportunities for Quantified Stf and The Gold

-0.77

Correlation Coefficient

Quantified Stf  The Gold

Pay attention - limited upside

The 3 months correlation between Quantified and The is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Quantified Stf Fund 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 Stf 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 Stf Fund 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 Quantified Stf i.e., Quantified Stf and The Gold go up and down completely randomly.

Pair Corralation between Quantified Stf and The Gold

Assuming the 90 days horizon Quantified Stf Fund is expected to under-perform the The Gold. In addition to that, Quantified Stf is 2.45 times more volatile than The Gold Bullion. It trades about -0.21 of its total potential returns per unit of risk. The Gold Bullion is currently generating about 0.29 per unit of volatility. If you would invest  2,033  in The Gold Bullion on December 29, 2024 and sell it today you would earn a total of  340.00  from holding The Gold Bullion or generate 16.72% return on investment over 90 days.

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

Quantified Stf Fund  vs.  The Gold Bullion

Quantified Stf

Risk-Adjusted Performance

Very Weak

Over the last 90 days Quantified Stf Fund 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 basic indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the fund 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 23 (%) 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 Quantified Stf and The Gold

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