Correlation Between US Global and Sprott Physical
Can any of the company-specific risk be diversified away by investing in both US Global 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 US Global and Sprott Physical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between US Global GO and Sprott Physical Gold, you can compare the effects of market volatilities on US Global 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 US Global with a short position of Sprott Physical. Check out your portfolio center. Please also check ongoing floating volatility patterns of US Global and Sprott Physical.
Diversification Opportunities for US Global and Sprott Physical
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between GOAU and Sprott is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding US Global GO and Sprott Physical Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sprott Physical Gold and US Global 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 US Global GO 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 Gold has no effect on the direction of US Global i.e., US Global and Sprott Physical go up and down completely randomly.
Pair Corralation between US Global and Sprott Physical
Given the investment horizon of 90 days US Global GO is expected to under-perform the Sprott Physical. In addition to that, US Global is 1.58 times more volatile than Sprott Physical Gold. It trades about -0.19 of its total potential returns per unit of risk. Sprott Physical Gold is currently generating about -0.17 per unit of volatility. If you would invest 2,130 in Sprott Physical Gold on August 27, 2024 and sell it today you would lose (112.00) from holding Sprott Physical Gold or give up 5.26% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
US Global GO vs. Sprott Physical Gold
Performance |
| Timeline |
| US Global GO |
| Sprott Physical Gold |
US Global and Sprott Physical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with US Global and Sprott Physical
The main advantage of trading using opposite US Global and Sprott Physical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if US Global 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.| US Global vs. iShares Silver Trust | US Global vs. SPDR Gold Shares | US Global vs. Newmont Goldcorp Corp | US Global vs. Direxion Daily Gold |
| Sprott Physical vs. Sprott Physical Gold | Sprott Physical vs. Sprott Physical Platinum | Sprott Physical vs. Sprott Inc | Sprott Physical vs. Brookfield Real Assets |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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