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  • Oil/Gold Arbitrage Opportunity [View article]
    I understand the problem with using a long time series like I did to show correlation. However, I originally used percentages like you advised. These did not yield desirables results either. It actually did not prove an inverse relationship between CPI and Unemployment. I downloaded all of these time series from the Fed as well so I know that they are sound. What other suggestions might you have to get a more accurate reading? I am eager to learn.

    However, the main assumption drawn between the Gold and Oil parity was from comparing their prices. If loose monetary influence is the only influence in driving these commodities, then this ratio would not be up to .15.

    Also, to be financially correct this is probably more close to a cross hedge on the U.S. dollar. True arbitrage opportunities only exist for a short while until it is traded away. This is not an arbitrage opportunity. You are correct.

    Jul 14 20:15 pm |Rating: 0 0
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