Correlation Between DMY Squared and Sprott Physical
Can any of the company-specific risk be diversified away by investing in both DMY Squared 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 DMY Squared and Sprott Physical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between dMY Squared Technology and Sprott Physical Gold, you can compare the effects of market volatilities on DMY Squared 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 DMY Squared with a short position of Sprott Physical. Check out your portfolio center. Please also check ongoing floating volatility patterns of DMY Squared and Sprott Physical.
Diversification Opportunities for DMY Squared and Sprott Physical
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between DMY and Sprott is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding dMY Squared Technology 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 DMY Squared 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 dMY Squared Technology 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 DMY Squared i.e., DMY Squared and Sprott Physical go up and down completely randomly.
Pair Corralation between DMY Squared and Sprott Physical
Given the investment horizon of 90 days dMY Squared Technology is expected to generate 0.24 times more return on investment than Sprott Physical. However, dMY Squared Technology is 4.25 times less risky than Sprott Physical. It trades about 0.07 of its potential returns per unit of risk. Sprott Physical Gold is currently generating about -0.04 per unit of risk. If you would invest 1,059 in dMY Squared Technology on August 24, 2024 and sell it today you would earn a total of 5.00 from holding dMY Squared Technology or generate 0.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
dMY Squared Technology vs. Sprott Physical Gold
Performance |
| Timeline |
| dMY Squared Technology |
| Sprott Physical Gold |
DMY Squared and Sprott Physical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DMY Squared and Sprott Physical
The main advantage of trading using opposite DMY Squared and Sprott Physical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DMY Squared 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.| DMY Squared vs. Distoken Acquisition | DMY Squared vs. Voyager Acquisition Corp | DMY Squared vs. YHN Acquisition I | DMY Squared vs. YHN Acquisition I |
| Sprott Physical vs. Sprott Physical Gold | Sprott Physical vs. Sprott Physical Platinum | Sprott Physical vs. Sprott Inc | Sprott Physical vs. Brookfield Real Assets |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
Other Complementary Tools
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites |