Correlation Between Diversified Bond and Precious Metals
Can any of the company-specific risk be diversified away by investing in both Diversified Bond and Precious Metals 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 Diversified Bond and Precious Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Diversified Bond Fund and Precious Metals Ultrasector, you can compare the effects of market volatilities on Diversified Bond and Precious Metals 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 Diversified Bond with a short position of Precious Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Diversified Bond and Precious Metals.
Diversification Opportunities for Diversified Bond and Precious Metals
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Diversified and Precious is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Diversified Bond Fund and Precious Metals Ultrasector in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Precious Metals Ultr and Diversified Bond 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 Diversified Bond Fund are associated (or correlated) with Precious Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Precious Metals Ultr has no effect on the direction of Diversified Bond i.e., Diversified Bond and Precious Metals go up and down completely randomly.
Pair Corralation between Diversified Bond and Precious Metals
Assuming the 90 days horizon Diversified Bond is expected to generate 17.78 times less return on investment than Precious Metals. But when comparing it to its historical volatility, Diversified Bond Fund is 13.62 times less risky than Precious Metals. It trades about 0.22 of its potential returns per unit of risk. Precious Metals Ultrasector is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest 8,724 in Precious Metals Ultrasector on July 20, 2025 and sell it today you would earn a total of 6,381 from holding Precious Metals Ultrasector or generate 73.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Diversified Bond Fund vs. Precious Metals Ultrasector
Performance |
| Timeline |
| Diversified Bond |
| Precious Metals Ultr |
Diversified Bond and Precious Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Diversified Bond and Precious Metals
The main advantage of trading using opposite Diversified Bond and Precious Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Diversified Bond position performs unexpectedly, Precious Metals 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 Precious Metals will offset losses from the drop in Precious Metals' long position.| Diversified Bond vs. Firsthand Alternative Energy | Diversified Bond vs. Hennessy Bp Energy | Diversified Bond vs. Goehring Rozencwajg Resources | Diversified Bond vs. Thrivent Natural Resources |
| Precious Metals vs. Pgim Jennison Technology | Precious Metals vs. Nationwide Bailard Technology | Precious Metals vs. Technology Ultrasector Profund | Precious Metals vs. Dreyfus Technology Growth |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
Other Complementary Tools
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing |