Correlation Between Sprott Focus and Stone Ridge
Can any of the company-specific risk be diversified away by investing in both Sprott Focus and Stone Ridge 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 Stone Ridge 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 Stone Ridge 2063, you can compare the effects of market volatilities on Sprott Focus and Stone Ridge 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 Stone Ridge. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sprott Focus and Stone Ridge.
Diversification Opportunities for Sprott Focus and Stone Ridge
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Sprott and Stone is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Sprott Focus Trust and Stone Ridge 2063 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stone Ridge 2063 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 Stone Ridge. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stone Ridge 2063 has no effect on the direction of Sprott Focus i.e., Sprott Focus and Stone Ridge go up and down completely randomly.
Pair Corralation between Sprott Focus and Stone Ridge
Given the investment horizon of 90 days Sprott Focus Trust is expected to generate 1.67 times more return on investment than Stone Ridge. However, Sprott Focus is 1.67 times more volatile than Stone Ridge 2063. It trades about 0.04 of its potential returns per unit of risk. Stone Ridge 2063 is currently generating about -0.23 per unit of risk. If you would invest 710.00 in Sprott Focus Trust on August 26, 2024 and sell it today you would earn a total of 93.00 from holding Sprott Focus Trust or generate 13.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 12.94% |
| Values | Daily Returns |
Sprott Focus Trust vs. Stone Ridge 2063
Performance |
| Timeline |
| Sprott Focus Trust |
| Stone Ridge 2063 |
Sprott Focus and Stone Ridge Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sprott Focus and Stone Ridge
The main advantage of trading using opposite Sprott Focus and Stone Ridge positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sprott Focus position performs unexpectedly, Stone Ridge 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 Stone Ridge will offset losses from the drop in Stone Ridge's long position.| Sprott Focus vs. PowerUp Acquisition Corp | Sprott Focus vs. Aurora Innovation | Sprott Focus vs. HUMANA INC | Sprott Focus vs. Aquagold International |
| Stone Ridge vs. Simplify Volatility Premium | Stone Ridge vs. Sprott Focus Trust | Stone Ridge vs. iShares Trust | Stone Ridge vs. iShares Trust |
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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