Correlation Between ECN Capital and Sprott Physical
Can any of the company-specific risk be diversified away by investing in both ECN Capital 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 ECN Capital and Sprott Physical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ECN Capital Corp and Sprott Physical Platinum, you can compare the effects of market volatilities on ECN Capital 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 ECN Capital with a short position of Sprott Physical. Check out your portfolio center. Please also check ongoing floating volatility patterns of ECN Capital and Sprott Physical.
Diversification Opportunities for ECN Capital and Sprott Physical
-0.83 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between ECN and Sprott is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding ECN Capital Corp and Sprott Physical Platinum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sprott Physical Platinum and ECN Capital 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 ECN Capital Corp 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 Platinum has no effect on the direction of ECN Capital i.e., ECN Capital and Sprott Physical go up and down completely randomly.
Pair Corralation between ECN Capital and Sprott Physical
Assuming the 90 days trading horizon ECN Capital Corp is expected to generate 1.18 times more return on investment than Sprott Physical. However, ECN Capital is 1.18 times more volatile than Sprott Physical Platinum. It trades about 0.04 of its potential returns per unit of risk. Sprott Physical Platinum is currently generating about 0.03 per unit of risk. If you would invest 274.00 in ECN Capital Corp on October 22, 2024 and sell it today you would earn a total of 44.00 from holding ECN Capital Corp or generate 16.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ECN Capital Corp vs. Sprott Physical Platinum
Performance |
| Timeline |
| ECN Capital Corp |
| Sprott Physical Platinum |
ECN Capital and Sprott Physical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ECN Capital and Sprott Physical
The main advantage of trading using opposite ECN Capital and Sprott Physical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ECN Capital 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.| ECN Capital vs. Element Fleet Management | ECN Capital vs. Colliers International Group | ECN Capital vs. Altus Group Limited | ECN Capital vs. FirstService Corp |
| Sprott Physical vs. North American Construction | Sprott Physical vs. Plaza Retail REIT | Sprott Physical vs. Queens Road Capital | Sprott Physical vs. Bird Construction |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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