Correlation Between Silver Bullion and CI Gold

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

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

Diversification Opportunities for Silver Bullion and CI Gold

0.82

Correlation Coefficient

Silver Bullion  CI Gold

Very poor diversification

The 3 months correlation between Silver and VALT is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Silver Bullion Trust and CI Gold Bullion in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CI Gold Bullion and Silver Bullion 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 Silver Bullion Trust are associated (or correlated) with CI Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CI Gold Bullion has no effect on the direction of Silver Bullion i.e., Silver Bullion and CI Gold go up and down completely randomly.

Pair Corralation between Silver Bullion and CI Gold

Assuming the 90 days trading horizon Silver Bullion is expected to generate 3.56 times less return on investment than CI Gold. In addition to that, Silver Bullion is 2.01 times more volatile than CI Gold Bullion. It trades about 0.01 of its total potential returns per unit of risk. CI Gold Bullion is currently generating about 0.09 per unit of volatility. If you would invest  2,904  in CI Gold Bullion on September 30, 2024 and sell it today you would earn a total of  329.00  from holding CI Gold Bullion or generate 11.33% return on investment over 90 days.

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

Silver Bullion Trust  vs.  CI Gold Bullion

Silver Bullion Trust

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Silver Bullion Trust has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Silver Bullion is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

CI Gold Bullion

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CI Gold Bullion has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, CI Gold is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Silver Bullion and CI Gold

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

The idea behind Silver Bullion Trust and CI Gold Bullion 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..