Correlation Between SPDR Gold and Siren DIVCON

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

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

Diversification Opportunities for SPDR Gold and Siren DIVCON

-0.06

Correlation Coefficient

SPDR Gold  Siren DIVCON

Good diversification

The 3 months correlation between SPDR and Siren is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding SPDR Gold Shares and Siren DIVCON Dividend in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Siren DIVCON Dividend and SPDR 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 SPDR Gold Shares are associated (or correlated) with Siren DIVCON. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Siren DIVCON Dividend has no effect on the direction of SPDR Gold i.e., SPDR Gold and Siren DIVCON go up and down completely randomly.

Pair Corralation between SPDR Gold and Siren DIVCON

Considering the 90-day investment horizon SPDR Gold is expected to generate 3.06 times less return on investment than Siren DIVCON. But when comparing it to its historical volatility, SPDR Gold Shares is 1.19 times less risky than Siren DIVCON. It trades about 0.02 of its potential returns per unit of risk. Siren DIVCON Dividend is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  4,220  in Siren DIVCON Dividend on May 5, 2025 and sell it today you would earn a total of  126.00  from holding Siren DIVCON Dividend or generate 2.99% return on investment over 90 days.

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

SPDR Gold Shares  vs.  Siren DIVCON Dividend

SPDR Gold Shares

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in SPDR Gold Shares are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound essential indicators, SPDR Gold is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Siren DIVCON Dividend

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Siren DIVCON Dividend are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, Siren DIVCON is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with SPDR Gold and Siren DIVCON

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

The idea behind SPDR Gold Shares and Siren DIVCON Dividend 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 AI Portfolio Prophet module to use AI to generate optimal portfolios and find profitable investment opportunities.