Correlation Between Butterfly Network and Sprott Focus
Can any of the company-specific risk be diversified away by investing in both Butterfly Network and Sprott Focus 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 Butterfly Network and Sprott Focus into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Butterfly Network and Sprott Focus Trust, you can compare the effects of market volatilities on Butterfly Network and Sprott Focus 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 Butterfly Network with a short position of Sprott Focus. Check out your portfolio center. Please also check ongoing floating volatility patterns of Butterfly Network and Sprott Focus.
Diversification Opportunities for Butterfly Network and Sprott Focus
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Butterfly and Sprott is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Butterfly Network and Sprott Focus Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sprott Focus Trust and Butterfly Network 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 Butterfly Network are associated (or correlated) with Sprott Focus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sprott Focus Trust has no effect on the direction of Butterfly Network i.e., Butterfly Network and Sprott Focus go up and down completely randomly.
Pair Corralation between Butterfly Network and Sprott Focus
Given the investment horizon of 90 days Butterfly Network is expected to generate 5.59 times more return on investment than Sprott Focus. However, Butterfly Network is 5.59 times more volatile than Sprott Focus Trust. It trades about 0.04 of its potential returns per unit of risk. Sprott Focus Trust is currently generating about 0.02 per unit of risk. If you would invest 224.00 in Butterfly Network on September 16, 2024 and sell it today you would earn a total of 115.00 from holding Butterfly Network or generate 51.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Butterfly Network vs. Sprott Focus Trust
Performance |
| Timeline |
| Butterfly Network |
| Sprott Focus Trust |
Butterfly Network and Sprott Focus Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Butterfly Network and Sprott Focus
The main advantage of trading using opposite Butterfly Network and Sprott Focus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Butterfly Network position performs unexpectedly, Sprott Focus 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 Focus will offset losses from the drop in Sprott Focus' long position.| Butterfly Network vs. Inari Medical | Butterfly Network vs. Masimo | Butterfly Network vs. Glaukos Corp | Butterfly Network vs. Inspire Medical Systems |
| Sprott Focus vs. Visa Class A | Sprott Focus vs. Diamond Hill Investment | Sprott Focus vs. AllianceBernstein Holding LP | Sprott Focus vs. Deutsche Bank AG |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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