Correlation Between Sprott Focus and Ensurge Micropower
Can any of the company-specific risk be diversified away by investing in both Sprott Focus and Ensurge Micropower 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 Ensurge Micropower 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 Ensurge Micropower ASA, you can compare the effects of market volatilities on Sprott Focus and Ensurge Micropower 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 Ensurge Micropower. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sprott Focus and Ensurge Micropower.
Diversification Opportunities for Sprott Focus and Ensurge Micropower
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Sprott and Ensurge is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Sprott Focus Trust and Ensurge Micropower ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ensurge Micropower ASA 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 Ensurge Micropower. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ensurge Micropower ASA has no effect on the direction of Sprott Focus i.e., Sprott Focus and Ensurge Micropower go up and down completely randomly.
Pair Corralation between Sprott Focus and Ensurge Micropower
Given the investment horizon of 90 days Sprott Focus is expected to generate 705.89 times less return on investment than Ensurge Micropower. But when comparing it to its historical volatility, Sprott Focus Trust is 92.34 times less risky than Ensurge Micropower. It trades about 0.03 of its potential returns per unit of risk. Ensurge Micropower ASA is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 404.00 in Ensurge Micropower ASA on September 13, 2024 and sell it today you would lose (375.00) from holding Ensurge Micropower ASA or give up 92.82% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 76.77% |
| Values | Daily Returns |
Sprott Focus Trust vs. Ensurge Micropower ASA
Performance |
| Timeline |
| Sprott Focus Trust |
| Ensurge Micropower ASA |
Sprott Focus and Ensurge Micropower Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sprott Focus and Ensurge Micropower
The main advantage of trading using opposite Sprott Focus and Ensurge Micropower positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sprott Focus position performs unexpectedly, Ensurge Micropower 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 Ensurge Micropower will offset losses from the drop in Ensurge Micropower's long position.| Sprott Focus vs. MFS Investment Grade | Sprott Focus vs. Eaton Vance National | Sprott Focus vs. Nuveen California Select | Sprott Focus vs. Federated Premier Municipal |
| Ensurge Micropower vs. Ensurge Micropower ASA | Ensurge Micropower vs. AAC Clyde Space | Ensurge Micropower vs. Ynvisible Interactive | Ensurge Micropower vs. World Technology Corp |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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