Correlation Between Global Gold and Six Circles
Can any of the company-specific risk be diversified away by investing in both Global Gold and Six Circles 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 Global Gold and Six Circles into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global Gold Fund and Six Circles Managed, you can compare the effects of market volatilities on Global Gold and Six Circles 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 Global Gold with a short position of Six Circles. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Gold and Six Circles.
Diversification Opportunities for Global Gold and Six Circles
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Global and Six is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Global Gold Fund and Six Circles Managed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Six Circles Managed and Global 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 Global Gold Fund are associated (or correlated) with Six Circles. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Six Circles Managed has no effect on the direction of Global Gold i.e., Global Gold and Six Circles go up and down completely randomly.
Pair Corralation between Global Gold and Six Circles
Assuming the 90 days horizon Global Gold Fund is expected to generate 2.49 times more return on investment than Six Circles. However, Global Gold is 2.49 times more volatile than Six Circles Managed. It trades about 0.45 of its potential returns per unit of risk. Six Circles Managed is currently generating about 0.16 per unit of risk. If you would invest 1,978 in Global Gold Fund on June 10, 2025 and sell it today you would earn a total of 288.00 from holding Global Gold Fund or generate 14.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global Gold Fund vs. Six Circles Managed
Performance |
| Timeline |
| Global Gold Fund |
| Six Circles Managed |
Global Gold and Six Circles Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Gold and Six Circles
The main advantage of trading using opposite Global Gold and Six Circles positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Gold position performs unexpectedly, Six Circles 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 Six Circles will offset losses from the drop in Six Circles' long position.| Global Gold vs. Mid Cap Value | Global Gold vs. Equity Growth Fund | Global Gold vs. Income Growth Fund | Global Gold vs. Diversified Bond Fund |
| Six Circles vs. Six Circles Ultra | Six Circles vs. Six Circles Global | Six Circles vs. Six Circles International | Six Circles vs. Six Circles Managed |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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