Correlation Between BetaPro Gold and Wealthsimple Shariah

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

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

Diversification Opportunities for BetaPro Gold and Wealthsimple Shariah

-0.37

Correlation Coefficient

BetaPro Gold  Wealthsimple Shariah

Very good diversification

The 3 months correlation between BetaPro and Wealthsimple is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding BetaPro Gold Bullion and Wealthsimple Shariah World in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wealthsimple Shariah and BetaPro 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 BetaPro Gold Bullion are associated (or correlated) with Wealthsimple Shariah. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wealthsimple Shariah has no effect on the direction of BetaPro Gold i.e., BetaPro Gold and Wealthsimple Shariah go up and down completely randomly.

Pair Corralation between BetaPro Gold and Wealthsimple Shariah

Assuming the 90 days trading horizon BetaPro Gold Bullion is expected to under-perform the Wealthsimple Shariah. In addition to that, BetaPro Gold is 3.76 times more volatile than Wealthsimple Shariah World. It trades about -0.02 of its total potential returns per unit of risk. Wealthsimple Shariah World is currently generating about 0.11 per unit of volatility. If you would invest  3,030  in Wealthsimple Shariah World on April 22, 2025 and sell it today you would earn a total of  142.00  from holding Wealthsimple Shariah World or generate 4.69% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.41%
Values	Daily Returns

BetaPro Gold Bullion  vs.  Wealthsimple Shariah World

BetaPro Gold Bullion

Risk-Adjusted Performance

Very Weak

Over the last 90 days BetaPro Gold Bullion has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, BetaPro Gold is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Wealthsimple Shariah

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Wealthsimple Shariah World are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, Wealthsimple Shariah is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with BetaPro Gold and Wealthsimple Shariah

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

The idea behind BetaPro Gold Bullion and Wealthsimple Shariah World 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.