Correlation Between IShares Silver and IShares Gold
Can any of the company-specific risk be diversified away by investing in both IShares Silver 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 IShares Silver and IShares Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Silver Trust and iShares Gold Trust, you can compare the effects of market volatilities on IShares Silver 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 IShares Silver with a short position of IShares Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Silver and IShares Gold.
Diversification Opportunities for IShares Silver and IShares Gold
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between IShares and IShares is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding iShares Silver Trust 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 IShares Silver 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 Silver Trust 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 IShares Silver i.e., IShares Silver and IShares Gold go up and down completely randomly.
Pair Corralation between IShares Silver and IShares Gold
Considering the 90-day investment horizon iShares Silver Trust is expected to generate 1.95 times more return on investment than IShares Gold. However, IShares Silver is 1.95 times more volatile than iShares Gold Trust. It trades about 0.29 of its potential returns per unit of risk. iShares Gold Trust is currently generating about 0.44 per unit of risk. If you would invest 2,329 in iShares Silver Trust on January 20, 2024 and sell it today you would earn a total of 291.00 from holding iShares Silver Trust or generate 12.49% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 95.65% |
Values | Daily Returns |
iShares Silver Trust vs. iShares Gold Trust
Performance |
Timeline |
iShares Silver Trust |
iShares Gold Trust |
IShares Silver and IShares Gold Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with IShares Silver and IShares Gold
The main advantage of trading using opposite IShares Silver and IShares Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Silver 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.IShares Silver vs. SPDR Gold Shares | IShares Silver vs. VanEck Gold Miners | IShares Silver vs. United States Oil | IShares Silver vs. iShares Gold Trust |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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