Correlation Between DB Gold and SPDR Gold

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

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

Diversification Opportunities for DB Gold and SPDR Gold

0.99

Correlation Coefficient

DB Gold  SPDR Gold

No risk reduction

The 3 months correlation between DGP and SPDR is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding DB Gold Double and SPDR Gold Mini in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR Gold Mini and DB 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 DB Gold Double are associated (or correlated) with SPDR Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR Gold Mini has no effect on the direction of DB Gold i.e., DB Gold and SPDR Gold go up and down completely randomly.

Pair Corralation between DB Gold and SPDR Gold

Considering the 90-day investment horizon DB Gold Double is expected to generate 2.05 times more return on investment than SPDR Gold. However, DB Gold is 2.05 times more volatile than SPDR Gold Mini. It trades about 0.02 of its potential returns per unit of risk. SPDR Gold Mini is currently generating about 0.02 per unit of risk. If you would invest  9,617  in DB Gold Double on May 2, 2025 and sell it today you would earn a total of  94.00  from holding DB Gold Double or generate 0.98% return on investment over 90 days.

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

DB Gold Double  vs.  SPDR Gold Mini

DB Gold Double

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in DB Gold Double are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable technical and fundamental indicators, DB Gold is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

SPDR Gold Mini

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in SPDR Gold Mini are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy fundamental indicators, SPDR Gold is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with DB Gold and SPDR Gold

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

The idea behind DB Gold Double and SPDR Gold Mini 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.