Correlation Between Gold and Northern International
Can any of the company-specific risk be diversified away by investing in both Gold and Northern International 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 Gold and Northern International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gold And Precious and Northern International Equity, you can compare the effects of market volatilities on Gold and Northern International 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 Gold with a short position of Northern International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gold and Northern International.
Diversification Opportunities for Gold and Northern International
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Gold and Northern is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Gold And Precious and Northern International Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Northern International and 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 Gold And Precious are associated (or correlated) with Northern International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Northern International has no effect on the direction of Gold i.e., Gold and Northern International go up and down completely randomly.
Pair Corralation between Gold and Northern International
Assuming the 90 days horizon Gold And Precious is expected to generate 3.97 times more return on investment than Northern International. However, Gold is 3.97 times more volatile than Northern International Equity. It trades about 0.15 of its potential returns per unit of risk. Northern International Equity is currently generating about 0.1 per unit of risk. If you would invest 2,222 in Gold And Precious on September 5, 2025 and sell it today you would earn a total of 595.00 from holding Gold And Precious or generate 26.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 98.44% |
| Values | Daily Returns |
Gold And Precious vs. Northern International Equity
Performance |
| Timeline |
| Gold And Precious |
| Northern International |
Gold and Northern International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gold and Northern International
The main advantage of trading using opposite Gold and Northern International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gold position performs unexpectedly, Northern International 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 Northern International will offset losses from the drop in Northern International's long position.| Gold vs. California High Yield Municipal | Gold vs. Vanguard High Yield Tax Exempt | Gold vs. Tiaa Cref High Yield Fund | Gold vs. Mainstay High Yield |
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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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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