Correlation Between ASA Gold and Sprott Physical
Can any of the company-specific risk be diversified away by investing in both ASA Gold 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 ASA Gold and Sprott Physical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ASA Gold and and Sprott Physical Gold, you can compare the effects of market volatilities on ASA Gold 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 ASA Gold with a short position of Sprott Physical. Check out your portfolio center. Please also check ongoing floating volatility patterns of ASA Gold and Sprott Physical.
Diversification Opportunities for ASA Gold and Sprott Physical
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between ASA and Sprott is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding ASA Gold and 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 ASA 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 ASA Gold and 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 ASA Gold i.e., ASA Gold and Sprott Physical go up and down completely randomly.
Pair Corralation between ASA Gold and Sprott Physical
Considering the 90-day investment horizon ASA Gold and is expected to generate 1.13 times more return on investment than Sprott Physical. However, ASA Gold is 1.13 times more volatile than Sprott Physical Gold. It trades about 0.02 of its potential returns per unit of risk. Sprott Physical Gold is currently generating about -0.12 per unit of risk. If you would invest 2,017 in ASA Gold and on September 20, 2024 and sell it today you would earn a total of 11.00 from holding ASA Gold and or generate 0.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
ASA Gold and vs. Sprott Physical Gold
Performance |
| Timeline |
| ASA Gold |
| Sprott Physical Gold |
ASA Gold and Sprott Physical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ASA Gold and Sprott Physical
The main advantage of trading using opposite ASA Gold and Sprott Physical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ASA Gold 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.| ASA Gold vs. AngloGold Ashanti plc | ASA Gold vs. Sprott Physical Gold | ASA Gold vs. Gold Fields Ltd | ASA Gold vs. Harmony Gold Mining |
| Sprott Physical vs. Sprott Physical Silver | Sprott Physical vs. Sprott Physical Platinum | Sprott Physical vs. Blue Owl Capital | Sprott Physical vs. Ares Management LP |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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