Correlation Between ZKB Gold and ZKB Palladium
Can any of the company-specific risk be diversified away by investing in both ZKB Gold and ZKB Palladium 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 ZKB Gold and ZKB Palladium into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ZKB Gold ETF and ZKB Palladium ETF, you can compare the effects of market volatilities on ZKB Gold and ZKB Palladium 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 ZKB Gold with a short position of ZKB Palladium. Check out your portfolio center. Please also check ongoing floating volatility patterns of ZKB Gold and ZKB Palladium.
Diversification Opportunities for ZKB Gold and ZKB Palladium
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between ZKB and ZKB is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding ZKB Gold ETF and ZKB Palladium ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ZKB Palladium ETF and ZKB 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 ZKB Gold ETF are associated (or correlated) with ZKB Palladium. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ZKB Palladium ETF has no effect on the direction of ZKB Gold i.e., ZKB Gold and ZKB Palladium go up and down completely randomly.
Pair Corralation between ZKB Gold and ZKB Palladium
Assuming the 90 days trading horizon ZKB Gold ETF is expected to under-perform the ZKB Palladium. But the etf apears to be less risky and, when comparing its historical volatility, ZKB Gold ETF is 2.27 times less risky than ZKB Palladium. The etf trades about 0.0 of its potential returns per unit of risk. The ZKB Palladium ETF is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 24,270 in ZKB Palladium ETF on May 23, 2025 and sell it today you would earn a total of 2,290 from holding ZKB Palladium ETF or generate 9.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 98.39% |
| Values | Daily Returns |
ZKB Gold ETF vs. ZKB Palladium ETF
Performance |
| Timeline |
| ZKB Gold ETF |
| ZKB Palladium ETF |
ZKB Gold and ZKB Palladium Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ZKB Gold and ZKB Palladium
The main advantage of trading using opposite ZKB Gold and ZKB Palladium positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ZKB Gold position performs unexpectedly, ZKB Palladium 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 ZKB Palladium will offset losses from the drop in ZKB Palladium's long position.| ZKB Gold vs. UBSFund Solutions MSCI | ZKB Gold vs. Vanguard SP 500 | ZKB Gold vs. iShares VII PLC | ZKB Gold vs. iShares Core SP |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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