Correlation Between IShares Gold and Orgenesis

Can any of the company-specific risk be diversified away by investing in both IShares Gold and Orgenesis 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 Orgenesis 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 Orgenesis, you can compare the effects of market volatilities on IShares Gold and Orgenesis 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 Orgenesis. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Gold and Orgenesis.

Diversification Opportunities for IShares Gold and Orgenesis

0.4

Correlation Coefficient

IShares Gold  Orgenesis

Very weak diversification

The 3 months correlation between IShares and Orgenesis is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding iShares Gold Trust and Orgenesis in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Orgenesis 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 Orgenesis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Orgenesis has no effect on the direction of IShares Gold i.e., IShares Gold and Orgenesis go up and down completely randomly.

Pair Corralation between IShares Gold and Orgenesis

Considering the 90-day investment horizon iShares Gold Trust is expected to generate 0.12 times more return on investment than Orgenesis. However, iShares Gold Trust is 8.25 times less risky than Orgenesis. It trades about 0.05 of its potential returns per unit of risk. Orgenesis is currently generating about -0.01 per unit of risk. If you would invest  3,604  in iShares Gold Trust on January 19, 2024 and sell it today you would earn a total of  882.00  from holding iShares Gold Trust or generate 24.47% return on investment over 90 days.

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

iShares Gold Trust  vs.  Orgenesis

iShares Gold Trust

Risk-Adjusted Performance

25 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in iShares Gold Trust are ranked lower than 25 (%) 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.

Orgenesis

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Orgenesis are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively conflicting technical and fundamental indicators, Orgenesis unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with IShares Gold and Orgenesis

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

The idea behind iShares Gold Trust and Orgenesis 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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.