Correlation Between SPDR Gold and IShares Silver
Can any of the company-specific risk be diversified away by investing in both SPDR Gold and IShares Silver 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 SPDR Gold and IShares Silver into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPDR Gold Shares and iShares Silver Trust, you can compare the effects of market volatilities on SPDR Gold and IShares Silver 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 SPDR Gold with a short position of IShares Silver. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR Gold and IShares Silver.
Diversification Opportunities for SPDR Gold and IShares Silver
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between SPDR and IShares is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding SPDR Gold Shares and iShares Silver Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Silver Trust and SPDR Gold 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 SPDR Gold Shares are associated (or correlated) with IShares Silver. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Silver Trust has no effect on the direction of SPDR Gold i.e., SPDR Gold and IShares Silver go up and down completely randomly.
Pair Corralation between SPDR Gold and IShares Silver
Considering the 90-day investment horizon SPDR Gold Shares is expected to generate 0.61 times more return on investment than IShares Silver. However, SPDR Gold Shares is 1.65 times less risky than IShares Silver. It trades about -0.07 of its potential returns per unit of risk. iShares Silver Trust is currently generating about -0.12 per unit of risk. If you would invest 21,648 in SPDR Gold Shares on February 6, 2024 and sell it today you would lose (352.00) from holding SPDR Gold Shares or give up 1.63% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
SPDR Gold Shares vs. iShares Silver Trust
Performance |
Timeline |
SPDR Gold Shares |
iShares Silver Trust |
SPDR Gold and IShares Silver Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with SPDR Gold and IShares Silver
The main advantage of trading using opposite SPDR Gold and IShares Silver positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR Gold position performs unexpectedly, IShares Silver 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 IShares Silver will offset losses from the drop in IShares Silver's long position.The idea behind SPDR Gold Shares and iShares Silver 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
Other Complementary Tools
Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
Share Portfolio Track or share privately all of your investments from the convenience of any device | |
Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing |