Correlation Between Sprott Focus and CBH
Can any of the company-specific risk be diversified away by investing in both Sprott Focus and CBH 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 Focus and CBH into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sprott Focus Trust and CBH, you can compare the effects of market volatilities on Sprott Focus and CBH 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 Focus with a short position of CBH. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sprott Focus and CBH.
Diversification Opportunities for Sprott Focus and CBH
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sprott and CBH is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Sprott Focus Trust and CBH in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CBH and Sprott Focus 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 Focus Trust are associated (or correlated) with CBH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CBH has no effect on the direction of Sprott Focus i.e., Sprott Focus and CBH go up and down completely randomly.
Pair Corralation between Sprott Focus and CBH
If you would invest 765.00 in Sprott Focus Trust on August 26, 2024 and sell it today you would earn a total of 38.00 from holding Sprott Focus Trust or generate 4.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 2.27% |
| Values | Daily Returns |
Sprott Focus Trust vs. CBH
Performance |
| Timeline |
| Sprott Focus Trust |
| CBH |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Sprott Focus and CBH Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sprott Focus and CBH
The main advantage of trading using opposite Sprott Focus and CBH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sprott Focus position performs unexpectedly, CBH 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 CBH will offset losses from the drop in CBH's long position.| Sprott Focus vs. MFS Investment Grade | Sprott Focus vs. Invesco High Income | Sprott Focus vs. Eaton Vance National | Sprott Focus vs. Nuveen California Select |
| CBH vs. MFS Investment Grade | CBH vs. Invesco High Income | CBH vs. Eaton Vance National | CBH vs. Nuveen California Select |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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