Correlation Between Sprott Physical and Restaurant Brands
Can any of the company-specific risk be diversified away by investing in both Sprott Physical and Restaurant Brands 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 Restaurant Brands 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 Restaurant Brands International, you can compare the effects of market volatilities on Sprott Physical and Restaurant Brands 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 Restaurant Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sprott Physical and Restaurant Brands.
Diversification Opportunities for Sprott Physical and Restaurant Brands
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Sprott and Restaurant is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Sprott Physical Gold and Restaurant Brands Internationa in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Restaurant Brands 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 Restaurant Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Restaurant Brands has no effect on the direction of Sprott Physical i.e., Sprott Physical and Restaurant Brands go up and down completely randomly.
Pair Corralation between Sprott Physical and Restaurant Brands
Assuming the 90 days trading horizon Sprott Physical Gold is expected to generate 1.06 times more return on investment than Restaurant Brands. However, Sprott Physical is 1.06 times more volatile than Restaurant Brands International. It trades about 0.05 of its potential returns per unit of risk. Restaurant Brands International is currently generating about 0.02 per unit of risk. If you would invest 3,349 in Sprott Physical Gold on August 28, 2024 and sell it today you would earn a total of 80.00 from holding Sprott Physical Gold or generate 2.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sprott Physical Gold vs. Restaurant Brands Internationa
Performance |
| Timeline |
| Sprott Physical Gold |
| Restaurant Brands |
Sprott Physical and Restaurant Brands Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sprott Physical and Restaurant Brands
The main advantage of trading using opposite Sprott Physical and Restaurant Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sprott Physical position performs unexpectedly, Restaurant Brands 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 Restaurant Brands will offset losses from the drop in Restaurant Brands' long position.| Sprott Physical vs. Sprott Physical Gold | Sprott Physical vs. Sprott Physical Silver | Sprott Physical vs. Sprott Physical Platinum | Sprott Physical vs. Wheaton Precious Metals |
| Restaurant Brands vs. Canadian Tire | Restaurant Brands vs. Dollarama | Restaurant Brands vs. Nutrien | Restaurant Brands vs. Magna International |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| CEOs Directory Screen CEOs from public companies around the world | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets |