Correlation Between MicroSectors Gold and MicroSectors FANG
Can any of the company-specific risk be diversified away by investing in both MicroSectors Gold and MicroSectors FANG 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 MicroSectors FANG 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 MicroSectors FANG Index, you can compare the effects of market volatilities on MicroSectors Gold and MicroSectors FANG 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 MicroSectors FANG. Check out your portfolio center. Please also check ongoing floating volatility patterns of MicroSectors Gold and MicroSectors FANG.
Diversification Opportunities for MicroSectors Gold and MicroSectors FANG
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between MicroSectors and MicroSectors is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding MicroSectors Gold Miners and MicroSectors FANG Index in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MicroSectors FANG Index 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 MicroSectors FANG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MicroSectors FANG Index has no effect on the direction of MicroSectors Gold i.e., MicroSectors Gold and MicroSectors FANG go up and down completely randomly.
Pair Corralation between MicroSectors Gold and MicroSectors FANG
Given the investment horizon of 90 days MicroSectors Gold Miners is expected to generate 3.42 times more return on investment than MicroSectors FANG. However, MicroSectors Gold is 3.42 times more volatile than MicroSectors FANG Index. It trades about 0.11 of its potential returns per unit of risk. MicroSectors FANG Index is currently generating about 0.04 per unit of risk. If you would invest 10,967 in MicroSectors Gold Miners on August 26, 2025 and sell it today you would earn a total of 4,535 from holding MicroSectors Gold Miners or generate 41.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
MicroSectors Gold Miners vs. MicroSectors FANG Index
Performance |
| Timeline |
| MicroSectors Gold Miners |
| MicroSectors FANG Index |
MicroSectors Gold and MicroSectors FANG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MicroSectors Gold and MicroSectors FANG
The main advantage of trading using opposite MicroSectors Gold and MicroSectors FANG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MicroSectors Gold position performs unexpectedly, MicroSectors FANG 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 MicroSectors FANG will offset losses from the drop in MicroSectors FANG's long position.| MicroSectors Gold vs. Direxion Daily Gold | MicroSectors Gold vs. IQ Hedge Multi Strategy | MicroSectors Gold vs. Direxion Daily Regional | MicroSectors Gold vs. Invesco Dividend Achievers |
| MicroSectors FANG vs. MicroSectors FANG ETN | MicroSectors FANG vs. HCM Defender 100 | MicroSectors FANG vs. VictoryShares WestEnd Sector | MicroSectors FANG vs. MicroSectors Gold Miners |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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