Monday, September 2, 2013

Apple = Gold?

While perusing charts this weekend, I came across this relationship. Since April of last year, AAPL and GLD have been generally moving together directionally.

Source: Bloomberg

 The correlation coefficient over this time period is 0.71, very high. 

 I show this chart with tongue firmly planted in cheek. I'm not a huge fan of analog charts and off hand I know of no apparent reason why this relationship should exist. Always keep in mind the old adage, "correlation does not imply causation." 

 But perhaps there is a fundamental, logical reason(s) for AAPL & GLD to trade roughly in-synch (a strong/weak USD?), let me know your thoughts.

 Happy Labor Day!
Posted by at

4 comments:

  1. CurtisSeptember 2, 2013 at 9:30 PM

    Apple and Gold are correlating only because people see them both as representing VALUE.

    ReplyDelete
  2. AnonymousSeptember 4, 2013 at 1:55 AM

    How did you calculate the correlation coefficient to be 0.71? How many periods did you take into acocunt? Your number is way off.

    ReplyDelete
  3. What's in the nameSeptember 4, 2013 at 4:18 PM

    Have we ruled out randomness? Or does everything have to have an explanation?
    When you toss an unbiased coin millions of times, there will be situations when there *might* be an inexplicably huge streak of tails or heads. And that's just going to be a lucky hour in a lucky day! There is no explanation.

    ReplyDelete
  4. Ryan DaviesSeptember 11, 2013 at 8:22 PM

    1) he probably calculated correlation over the time period represented on the chart.

    2) he didn't rule out randomness, ie his "correlation / Causation" comment.

    3) I think the 1 similarity they both have, which is why i think it is an interest overlay, is that both apple and gold went through years of absolutely massive accumulation. When the story changes, the process of mass "de-accumulation" has many similarities in form, regardless of the asset.

    ReplyDelete

Subscribe to: Post Comments (Atom)