Correlation Between IShares Gold and Atkore International

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

By analyzing existing cross correlation between iShares Gold Trust and Atkore International Group, you can compare the effects of market volatilities on IShares Gold and Atkore International 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 IShares Gold with a short position of Atkore International. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Gold and Atkore International.

Diversification Opportunities for IShares Gold and Atkore International

0.81

Correlation Coefficient

IShares Gold  Atkore International

Very poor diversification

The 3 months correlation between IShares and Atkore is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding iShares Gold Trust and Atkore International Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atkore International and IShares 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 iShares Gold Trust are associated (or correlated) with Atkore International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atkore International has no effect on the direction of IShares Gold i.e., IShares Gold and Atkore International go up and down completely randomly.

Pair Corralation between IShares Gold and Atkore International

Considering the 90-day investment horizon iShares Gold Trust is expected to generate 0.42 times more return on investment than Atkore International. However, iShares Gold Trust is 2.38 times less risky than Atkore International. It trades about 0.52 of its potential returns per unit of risk. Atkore International Group is currently generating about -0.02 per unit of risk. If you would invest  4,085  in iShares Gold Trust on January 17, 2024 and sell it today you would earn a total of  428.00  from holding iShares Gold Trust or generate 10.48% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

iShares Gold Trust  vs.  Atkore International Group

iShares Gold Trust

Risk-Adjusted Performance

28 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in iShares Gold Trust are ranked lower than 28 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively abnormal basic indicators, IShares Gold unveiled solid returns over the last few months and may actually be approaching a breakup point.

Atkore International

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Atkore International Group are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak forward-looking signals, Atkore International reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with IShares Gold and Atkore International

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

The idea behind iShares Gold Trust and Atkore International Group 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.