Correlation Between SPDR Gold and Quaker Investment

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

By analyzing existing cross correlation between SPDR Gold MiniShares and Quaker Investment Trust, you can compare the effects of market volatilities on SPDR Gold and Quaker Investment 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 Quaker Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR Gold and Quaker Investment.

Diversification Opportunities for SPDR Gold and Quaker Investment

-0.46

Correlation Coefficient

SPDR Gold  Quaker Investment

Very good diversification

The 3 months correlation between SPDR and Quaker is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding SPDR Gold MiniShares and Quaker Investment Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Quaker Investment 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 MiniShares are associated (or correlated) with Quaker Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Quaker Investment Trust has no effect on the direction of SPDR Gold i.e., SPDR Gold and Quaker Investment go up and down completely randomly.

Pair Corralation between SPDR Gold and Quaker Investment

Given the investment horizon of 90 days SPDR Gold MiniShares is expected to generate 3.04 times more return on investment than Quaker Investment. However, SPDR Gold is 3.04 times more volatile than Quaker Investment Trust. It trades about 0.12 of its potential returns per unit of risk. Quaker Investment Trust is currently generating about 0.24 per unit of risk. If you would invest  4,604  in SPDR Gold MiniShares on February 23, 2024 and sell it today you would earn a total of  112.00  from holding SPDR Gold MiniShares or generate 2.43% return on investment over 90 days.

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

SPDR Gold MiniShares  vs.  Quaker Investment Trust

SPDR Gold MiniShares

Risk-Adjusted Performance

20 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in SPDR Gold MiniShares are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain fundamental indicators, SPDR Gold displayed solid returns over the last few months and may actually be approaching a breakup point.

Quaker Investment Trust

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Quaker Investment Trust has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Quaker Investment is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with SPDR Gold and Quaker Investment

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

The idea behind SPDR Gold MiniShares and Quaker Investment 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.

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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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.