Correlation Between Global X and Sprott Junior
Can any of the company-specific risk be diversified away by investing in both Global X and Sprott Junior 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 Global X and Sprott Junior into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global X Gold and Sprott Junior Gold, you can compare the effects of market volatilities on Global X and Sprott Junior 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 Global X with a short position of Sprott Junior. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global X and Sprott Junior.
Diversification Opportunities for Global X and Sprott Junior
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Global and Sprott is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Global X Gold and Sprott Junior Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sprott Junior Gold and Global X 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 Global X Gold are associated (or correlated) with Sprott Junior. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sprott Junior Gold has no effect on the direction of Global X i.e., Global X and Sprott Junior go up and down completely randomly.
Pair Corralation between Global X and Sprott Junior
Given the investment horizon of 90 days Global X Gold is expected to under-perform the Sprott Junior. In addition to that, Global X is 1.08 times more volatile than Sprott Junior Gold. It trades about -0.2 of its total potential returns per unit of risk. Sprott Junior Gold is currently generating about -0.21 per unit of volatility. If you would invest 4,059 in Sprott Junior Gold on August 28, 2024 and sell it today you would lose (404.00) from holding Sprott Junior Gold or give up 9.95% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global X Gold vs. Sprott Junior Gold
Performance |
| Timeline |
| Global X Gold |
| Sprott Junior Gold |
Global X and Sprott Junior Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global X and Sprott Junior
The main advantage of trading using opposite Global X and Sprott Junior positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global X position performs unexpectedly, Sprott Junior 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 Junior will offset losses from the drop in Sprott Junior's long position.| Global X vs. US Global GO | Global X vs. Sprott Junior Gold | Global X vs. Sprott Gold Miners | Global X vs. iShares MSCI Global |
| Sprott Junior vs. Sprott Gold Miners | Sprott Junior vs. Amplify ETF Trust | Sprott Junior vs. US Global GO | Sprott Junior vs. Global X Gold |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
Other Complementary Tools
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine |