Correlation Between Sprott Physical and Helios Fairfax
Can any of the company-specific risk be diversified away by investing in both Sprott Physical and Helios Fairfax 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 Physical and Helios Fairfax into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sprott Physical Gold and Helios Fairfax Partners, you can compare the effects of market volatilities on Sprott Physical and Helios Fairfax 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 Physical with a short position of Helios Fairfax. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sprott Physical and Helios Fairfax.
Diversification Opportunities for Sprott Physical and Helios Fairfax
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Sprott and Helios is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Sprott Physical Gold and Helios Fairfax Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Helios Fairfax Partners and Sprott Physical 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 Physical Gold are associated (or correlated) with Helios Fairfax. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Helios Fairfax Partners has no effect on the direction of Sprott Physical i.e., Sprott Physical and Helios Fairfax go up and down completely randomly.
Pair Corralation between Sprott Physical and Helios Fairfax
Assuming the 90 days trading horizon Sprott Physical Gold is expected to generate 0.18 times more return on investment than Helios Fairfax. However, Sprott Physical Gold is 5.49 times less risky than Helios Fairfax. It trades about 0.28 of its potential returns per unit of risk. Helios Fairfax Partners is currently generating about -0.01 per unit of risk. If you would invest 2,873 in Sprott Physical Gold on November 30, 2024 and sell it today you would earn a total of 328.00 from holding Sprott Physical Gold or generate 11.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sprott Physical Gold vs. Helios Fairfax Partners
Performance |
| Timeline |
| Sprott Physical Gold |
| Helios Fairfax Partners |
Sprott Physical and Helios Fairfax Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sprott Physical and Helios Fairfax
The main advantage of trading using opposite Sprott Physical and Helios Fairfax positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sprott Physical position performs unexpectedly, Helios Fairfax 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 Helios Fairfax will offset losses from the drop in Helios Fairfax's long position.| Sprott Physical vs. Sprott Physical Silver | Sprott Physical vs. Sprott Physical Gold | Sprott Physical vs. Sprott Physical Platinum | Sprott Physical vs. Sprott Physical Uranium |
| Helios Fairfax vs. Nicola Mining | Helios Fairfax vs. Monument Mining Limited | Helios Fairfax vs. Flow Beverage Corp | Helios Fairfax vs. Perseus Mining |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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