Correlation Between MicroSectors Gold and STKd 100

Can any of the company-specific risk be diversified away by investing in both MicroSectors Gold and STKd 100 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 MicroSectors Gold and STKd 100 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between MicroSectors Gold Miners and STKd 100 percent, you can compare the effects of market volatilities on MicroSectors Gold and STKd 100 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 MicroSectors Gold with a short position of STKd 100. Check out your portfolio center. Please also check ongoing floating volatility patterns of MicroSectors Gold and STKd 100.

Diversification Opportunities for MicroSectors Gold and STKd 100

-0.36

Correlation Coefficient

MicroSectors Gold  STKd 100

Very good diversification

The 3 months correlation between MicroSectors and STKd is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding MicroSectors Gold Miners and STKd 100 percent in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on STKd 100 percent and MicroSectors 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 MicroSectors Gold Miners are associated (or correlated) with STKd 100. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of STKd 100 percent has no effect on the direction of MicroSectors Gold i.e., MicroSectors Gold and STKd 100 go up and down completely randomly.

Pair Corralation between MicroSectors Gold and STKd 100

Given the investment horizon of 90 days MicroSectors Gold Miners is expected to generate 1.46 times more return on investment than STKd 100. However, MicroSectors Gold is 1.46 times more volatile than STKd 100 percent. It trades about 0.19 of its potential returns per unit of risk. STKd 100 percent is currently generating about 0.0 per unit of risk. If you would invest  5,117  in MicroSectors Gold Miners on May 14, 2025 and sell it today you would earn a total of  4,027  from holding MicroSectors Gold Miners or generate 78.7% return on investment over 90 days.

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

MicroSectors Gold Miners  vs.  STKd 100 percent

MicroSectors Gold Miners

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in MicroSectors Gold Miners are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, MicroSectors Gold unveiled solid returns over the last few months and may actually be approaching a breakup point.

STKd 100 percent

Risk-Adjusted Performance

Weakest

Over the last 90 days STKd 100 percent has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, STKd 100 is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with MicroSectors Gold and STKd 100

The main advantage of trading using opposite MicroSectors Gold and STKd 100 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MicroSectors Gold position performs unexpectedly, STKd 100 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 STKd 100 will offset losses from the drop in STKd 100's long position.

The idea behind MicroSectors Gold Miners and STKd 100 percent 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.