Correlation Between Global X and Sprott Junior
Can any of the company-specific risk be diversified away by investing in both Global X and Sprott Junior 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 Global X and Sprott Junior into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global X Copper and Sprott Junior Copper, you can compare the effects of market volatilities on Global X and Sprott Junior 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 Global X with a short position of Sprott Junior. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global X and Sprott Junior.
Diversification Opportunities for Global X and Sprott Junior
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Global and Sprott is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Global X Copper and Sprott Junior Copper in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sprott Junior Copper and Global X 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 Global X Copper are associated (or correlated) with Sprott Junior. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sprott Junior Copper has no effect on the direction of Global X i.e., Global X and Sprott Junior go up and down completely randomly.
Pair Corralation between Global X and Sprott Junior
Given the investment horizon of 90 days Global X is expected to generate 1.16 times less return on investment than Sprott Junior. In addition to that, Global X is 1.07 times more volatile than Sprott Junior Copper. It trades about 0.05 of its total potential returns per unit of risk. Sprott Junior Copper is currently generating about 0.07 per unit of volatility. If you would invest 1,677 in Sprott Junior Copper on August 26, 2024 and sell it today you would earn a total of 543.00 from holding Sprott Junior Copper or generate 32.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global X Copper vs. Sprott Junior Copper
Performance |
| Timeline |
| Global X Copper |
| Sprott Junior Copper |
Global X and Sprott Junior Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global X and Sprott Junior
The main advantage of trading using opposite Global X and Sprott Junior positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global X position performs unexpectedly, Sprott Junior 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 Junior will offset losses from the drop in Sprott Junior's long position.| Global X vs. Sprott Junior Copper | Global X vs. Sprott Junior Uranium | Global X vs. Sprott Nickel Miners |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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