Correlation Between Barclays Capital and IShares Gold
Can any of the company-specific risk be diversified away by investing in both Barclays Capital and IShares 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 Barclays Capital and IShares Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Barclays Capital and iShares Gold Trust, you can compare the effects of market volatilities on Barclays Capital and IShares 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 Barclays Capital with a short position of IShares Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barclays Capital and IShares Gold.
Diversification Opportunities for Barclays Capital and IShares Gold
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Barclays and IShares is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Barclays Capital and iShares Gold Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Gold Trust and Barclays Capital 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 Barclays Capital are associated (or correlated) with IShares Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Gold Trust has no effect on the direction of Barclays Capital i.e., Barclays Capital and IShares Gold go up and down completely randomly.
Pair Corralation between Barclays Capital and IShares Gold
Considering the 90-day investment horizon Barclays Capital is expected to generate 3.52 times less return on investment than IShares Gold. In addition to that, Barclays Capital is 1.69 times more volatile than iShares Gold Trust. It trades about 0.01 of its total potential returns per unit of risk. iShares Gold Trust is currently generating about 0.05 per unit of volatility. If you would invest 3,582 in iShares Gold Trust on January 24, 2024 and sell it today you would earn a total of 822.00 from holding iShares Gold Trust or generate 22.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 53.64% |
| Values | Daily Returns |
Barclays Capital vs. iShares Gold Trust
Performance |
| Timeline |
| Barclays Capital |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| iShares Gold Trust |
Barclays Capital and IShares Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barclays Capital and IShares Gold
The main advantage of trading using opposite Barclays Capital and IShares Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barclays Capital position performs unexpectedly, IShares 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 IShares Gold will offset losses from the drop in IShares Gold's long position.The idea behind Barclays Capital and iShares Gold 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.| IShares Gold vs. iShares Silver Trust | IShares Gold vs. VanEck Gold Miners | IShares Gold vs. SPDR Gold Shares | IShares Gold vs. Invesco DB Commodity |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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