Correlation Between Sprott Nickel and IShares North
Can any of the company-specific risk be diversified away by investing in both Sprott Nickel and IShares North 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 Nickel and IShares North into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sprott Nickel Miners and iShares North American, you can compare the effects of market volatilities on Sprott Nickel and IShares North 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 Nickel with a short position of IShares North. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sprott Nickel and IShares North.
Diversification Opportunities for Sprott Nickel and IShares North
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sprott and IShares is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Sprott Nickel Miners and iShares North American in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares North American and Sprott Nickel 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 Nickel Miners are associated (or correlated) with IShares North. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares North American has no effect on the direction of Sprott Nickel i.e., Sprott Nickel and IShares North go up and down completely randomly.
Pair Corralation between Sprott Nickel and IShares North
Given the investment horizon of 90 days Sprott Nickel Miners is expected to under-perform the IShares North. In addition to that, Sprott Nickel is 1.41 times more volatile than iShares North American. It trades about -0.06 of its total potential returns per unit of risk. iShares North American is currently generating about 0.04 per unit of volatility. If you would invest 3,744 in iShares North American on November 19, 2024 and sell it today you would earn a total of 752.00 from holding iShares North American or generate 20.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 96.77% |
| Values | Daily Returns |
Sprott Nickel Miners vs. iShares North American
Performance |
| Timeline |
| Sprott Nickel Miners |
| iShares North American |
Sprott Nickel and IShares North Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sprott Nickel and IShares North
The main advantage of trading using opposite Sprott Nickel and IShares North positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sprott Nickel position performs unexpectedly, IShares North 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 North will offset losses from the drop in IShares North's long position.| Sprott Nickel vs. iShares Dividend and | Sprott Nickel vs. Martin Currie Sustainable | Sprott Nickel vs. VictoryShares THB Mid | Sprott Nickel vs. Mast Global Battery |
| IShares North vs. iShares Energy ETF | IShares North vs. iShares Basic Materials | IShares North vs. iShares Global Energy | IShares North vs. iShares Cohen Steers |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
Other Complementary Tools
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges |