Correlation Between Sprott Focus and IShares Trust
Can any of the company-specific risk be diversified away by investing in both Sprott Focus and IShares Trust 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 IShares Trust 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 iShares Trust , you can compare the effects of market volatilities on Sprott Focus and IShares Trust 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 IShares Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sprott Focus and IShares Trust.
Diversification Opportunities for Sprott Focus and IShares Trust
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Sprott and IShares is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Sprott Focus Trust and iShares Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Trust 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 IShares Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Trust has no effect on the direction of Sprott Focus i.e., Sprott Focus and IShares Trust go up and down completely randomly.
Pair Corralation between Sprott Focus and IShares Trust
Given the investment horizon of 90 days Sprott Focus Trust is expected to generate 3.25 times more return on investment than IShares Trust. However, Sprott Focus is 3.25 times more volatile than iShares Trust . It trades about 0.02 of its potential returns per unit of risk. iShares Trust is currently generating about 0.03 per unit of risk. If you would invest 738.00 in Sprott Focus Trust on August 29, 2024 and sell it today you would earn a total of 71.00 from holding Sprott Focus Trust or generate 9.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sprott Focus Trust vs. iShares Trust
Performance |
| Timeline |
| Sprott Focus Trust |
| iShares Trust |
Sprott Focus and IShares Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sprott Focus and IShares Trust
The main advantage of trading using opposite Sprott Focus and IShares Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sprott Focus position performs unexpectedly, IShares Trust 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 IShares Trust will offset losses from the drop in IShares Trust'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 |
| IShares Trust vs. iShares Trust | IShares Trust vs. iShares Trust | IShares Trust vs. Simplify Volatility Premium | IShares Trust vs. Tidal Trust II |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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