Correlation Between Sprott Nickel and Sprott Junior
Can any of the company-specific risk be diversified away by investing in both Sprott Nickel 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 Sprott Nickel and Sprott Junior 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 Sprott Junior Uranium, you can compare the effects of market volatilities on Sprott Nickel 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 Sprott Nickel with a short position of Sprott Junior. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sprott Nickel and Sprott Junior.
Diversification Opportunities for Sprott Nickel and Sprott Junior
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sprott and Sprott is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Sprott Nickel Miners and Sprott Junior Uranium in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sprott Junior Uranium 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 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 Uranium has no effect on the direction of Sprott Nickel i.e., Sprott Nickel and Sprott Junior go up and down completely randomly.
Pair Corralation between Sprott Nickel and Sprott Junior
Given the investment horizon of 90 days Sprott Nickel Miners is expected to under-perform the Sprott Junior. But the etf apears to be less risky and, when comparing its historical volatility, Sprott Nickel Miners is 2.04 times less risky than Sprott Junior. The etf trades about -0.22 of its potential returns per unit of risk. The Sprott Junior Uranium is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 2,461 in Sprott Junior Uranium on August 27, 2024 and sell it today you would lose (46.00) from holding Sprott Junior Uranium or give up 1.87% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sprott Nickel Miners vs. Sprott Junior Uranium
Performance |
| Timeline |
| Sprott Nickel Miners |
| Sprott Junior Uranium |
Sprott Nickel and Sprott Junior Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sprott Nickel and Sprott Junior
The main advantage of trading using opposite Sprott Nickel and Sprott Junior positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sprott Nickel 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.| Sprott Nickel vs. iShares Dividend and | Sprott Nickel vs. Martin Currie Sustainable | Sprott Nickel vs. VictoryShares THB Mid | Sprott Nickel vs. Mast Global Battery |
| Sprott Junior vs. Sprott Junior Copper | Sprott Junior vs. Sprott Energy Transition | Sprott Junior vs. Sprott Lithium Miners | Sprott Junior vs. Sprott Uranium Miners |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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