Correlation Between Vulcan Value and SPDR Gold
Can any of the company-specific risk be diversified away by investing in both Vulcan Value and SPDR 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 Vulcan Value and SPDR Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vulcan Value Partners and SPDR Gold Shares, you can compare the effects of market volatilities on Vulcan Value and SPDR 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 Vulcan Value with a short position of SPDR Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vulcan Value and SPDR Gold.
Diversification Opportunities for Vulcan Value and SPDR Gold
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Vulcan and SPDR is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Vulcan Value Partners and SPDR Gold Shares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR Gold Shares and Vulcan Value 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 Vulcan Value Partners are associated (or correlated) with SPDR Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR Gold Shares has no effect on the direction of Vulcan Value i.e., Vulcan Value and SPDR Gold go up and down completely randomly.
Pair Corralation between Vulcan Value and SPDR Gold
Assuming the 90 days horizon Vulcan Value Partners is expected to under-perform the SPDR Gold. But the mutual fund apears to be less risky and, when comparing its historical volatility, Vulcan Value Partners is 1.29 times less risky than SPDR Gold. The mutual fund trades about -0.29 of its potential returns per unit of risk. The SPDR Gold Shares is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 25,994 in SPDR Gold Shares on December 5, 2024 and sell it today you would earn a total of 912.00 from holding SPDR Gold Shares or generate 3.51% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Vulcan Value Partners vs. SPDR Gold Shares
Performance |
Timeline |
Vulcan Value Partners |
SPDR Gold Shares |
Vulcan Value and SPDR Gold Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Vulcan Value and SPDR Gold
The main advantage of trading using opposite Vulcan Value and SPDR Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vulcan Value position performs unexpectedly, SPDR 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 SPDR Gold will offset losses from the drop in SPDR Gold's long position.Vulcan Value vs. Us Government Securities | Vulcan Value vs. Dreyfus Government Cash | Vulcan Value vs. Western Asset Premier | Vulcan Value vs. Us Government Securities |
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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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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