Correlation Between Sprott Physical and Algonquin Power
Can any of the company-specific risk be diversified away by investing in both Sprott Physical and Algonquin Power 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 Sprott Physical and Algonquin Power into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sprott Physical Gold and Algonquin Power Utilities, you can compare the effects of market volatilities on Sprott Physical and Algonquin Power 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 Sprott Physical with a short position of Algonquin Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sprott Physical and Algonquin Power.
Diversification Opportunities for Sprott Physical and Algonquin Power
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Sprott and Algonquin is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Sprott Physical Gold and Algonquin Power Utilities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Algonquin Power Utilities and Sprott Physical 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 Sprott Physical Gold are associated (or correlated) with Algonquin Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Algonquin Power Utilities has no effect on the direction of Sprott Physical i.e., Sprott Physical and Algonquin Power go up and down completely randomly.
Pair Corralation between Sprott Physical and Algonquin Power
Assuming the 90 days trading horizon Sprott Physical Gold is expected to generate 1.23 times more return on investment than Algonquin Power. However, Sprott Physical is 1.23 times more volatile than Algonquin Power Utilities. It trades about 0.07 of its potential returns per unit of risk. Algonquin Power Utilities is currently generating about 0.07 per unit of risk. If you would invest 1,767 in Sprott Physical Gold on September 1, 2024 and sell it today you would earn a total of 675.00 from holding Sprott Physical Gold or generate 38.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sprott Physical Gold vs. Algonquin Power Utilities
Performance |
| Timeline |
| Sprott Physical Gold |
| Algonquin Power Utilities |
Sprott Physical and Algonquin Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sprott Physical and Algonquin Power
The main advantage of trading using opposite Sprott Physical and Algonquin Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sprott Physical position performs unexpectedly, Algonquin Power 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 Algonquin Power will offset losses from the drop in Algonquin Power's long position.| Sprott Physical vs. Diamond Estates Wines | Sprott Physical vs. Algoma Steel Group | Sprott Physical vs. Constellation Software | Sprott Physical vs. Canadian Utilities Limited |
| Algonquin Power vs. Royal Canadian Mint | Algonquin Power vs. Cymbria | Algonquin Power vs. BMO Aggregate Bond | Algonquin Power vs. iShares Canadian HYBrid |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
Other Complementary Tools
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments |