Correlation Between IShares Gold and Invesco WilderHill

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

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

Diversification Opportunities for IShares Gold and Invesco WilderHill

0.32

Correlation Coefficient

IShares Gold  Invesco WilderHill

Weak diversification

The 3 months correlation between IShares and Invesco is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding iShares Gold Trust and Invesco WilderHill Clean in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco WilderHill Clean and IShares 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 iShares Gold Trust are associated (or correlated) with Invesco WilderHill. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco WilderHill Clean has no effect on the direction of IShares Gold i.e., IShares Gold and Invesco WilderHill go up and down completely randomly.

Pair Corralation between IShares Gold and Invesco WilderHill

Given the investment horizon of 90 days IShares Gold is expected to generate 72.4 times less return on investment than Invesco WilderHill. But when comparing it to its historical volatility, iShares Gold Trust is 1.98 times less risky than Invesco WilderHill. It trades about 0.01 of its potential returns per unit of risk. Invesco WilderHill Clean is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest  1,640  in Invesco WilderHill Clean on May 7, 2025 and sell it today you would earn a total of  650.00  from holding Invesco WilderHill Clean or generate 39.63% return on investment over 90 days.

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

iShares Gold Trust  vs.  Invesco WilderHill Clean

iShares Gold Trust

Risk-Adjusted Performance

Weakest

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

Invesco WilderHill Clean

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Invesco WilderHill Clean are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak fundamental drivers, Invesco WilderHill showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with IShares Gold and Invesco WilderHill

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

The idea behind iShares Gold Trust and Invesco WilderHill Clean 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.