Correlation Between Associated Capital and Sprott Physical
Can any of the company-specific risk be diversified away by investing in both Associated Capital and Sprott Physical 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 Associated Capital and Sprott Physical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Associated Capital Group and Sprott Physical Gold, you can compare the effects of market volatilities on Associated Capital and Sprott Physical 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 Associated Capital with a short position of Sprott Physical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Associated Capital and Sprott Physical.
Diversification Opportunities for Associated Capital and Sprott Physical
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Associated and Sprott is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Associated Capital Group and Sprott Physical Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sprott Physical Gold and Associated Capital 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 Associated Capital Group are associated (or correlated) with Sprott Physical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sprott Physical Gold has no effect on the direction of Associated Capital i.e., Associated Capital and Sprott Physical go up and down completely randomly.
Pair Corralation between Associated Capital and Sprott Physical
Allowing for the 90-day total investment horizon Associated Capital Group is expected to generate 1.78 times more return on investment than Sprott Physical. However, Associated Capital is 1.78 times more volatile than Sprott Physical Gold. It trades about 0.14 of its potential returns per unit of risk. Sprott Physical Gold is currently generating about 0.06 per unit of risk. If you would invest 3,120 in Associated Capital Group on August 28, 2024 and sell it today you would earn a total of 505.00 from holding Associated Capital Group or generate 16.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Associated Capital Group vs. Sprott Physical Gold
Performance |
| Timeline |
| Associated Capital |
| Sprott Physical Gold |
Associated Capital and Sprott Physical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Associated Capital and Sprott Physical
The main advantage of trading using opposite Associated Capital and Sprott Physical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Associated Capital position performs unexpectedly, Sprott Physical 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 Sprott Physical will offset losses from the drop in Sprott Physical's long position.| Associated Capital vs. PowerUp Acquisition Corp | Associated Capital vs. Aurora Innovation | Associated Capital vs. HUMANA INC | Associated Capital vs. Aquagold International |
| Sprott Physical vs. Sprott Physical Gold | Sprott Physical vs. Sprott Physical Platinum | Sprott Physical vs. Sprott Inc | Sprott Physical vs. Brookfield Real Assets |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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