Correlation Between Sprott Physical and Canadian General
Can any of the company-specific risk be diversified away by investing in both Sprott Physical and Canadian General 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 Canadian General into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sprott Physical Silver and Canadian General Investments, you can compare the effects of market volatilities on Sprott Physical and Canadian General 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 Canadian General. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sprott Physical and Canadian General.
Diversification Opportunities for Sprott Physical and Canadian General
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sprott and Canadian is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Sprott Physical Silver and Canadian General Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canadian General Inv 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 Silver are associated (or correlated) with Canadian General. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canadian General Inv has no effect on the direction of Sprott Physical i.e., Sprott Physical and Canadian General go up and down completely randomly.
Pair Corralation between Sprott Physical and Canadian General
Assuming the 90 days trading horizon Sprott Physical Silver is expected to generate 1.58 times more return on investment than Canadian General. However, Sprott Physical is 1.58 times more volatile than Canadian General Investments. It trades about 0.04 of its potential returns per unit of risk. Canadian General Investments is currently generating about 0.05 per unit of risk. If you would invest 1,093 in Sprott Physical Silver on September 3, 2024 and sell it today you would earn a total of 359.00 from holding Sprott Physical Silver or generate 32.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sprott Physical Silver vs. Canadian General Investments
Performance |
| Timeline |
| Sprott Physical Silver |
| Canadian General Inv |
Sprott Physical and Canadian General Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sprott Physical and Canadian General
The main advantage of trading using opposite Sprott Physical and Canadian General positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sprott Physical position performs unexpectedly, Canadian General 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 Canadian General will offset losses from the drop in Canadian General's long position.| Sprott Physical vs. Colliers International Group | Sprott Physical vs. Altus Group Limited | Sprott Physical vs. Harvest Global REIT | Sprott Physical vs. International Zeolite Corp |
| Canadian General vs. Uniteds Limited | Canadian General vs. Economic Investment Trust | Canadian General vs. abrdn Asia Pacific | Canadian General vs. Clairvest Group |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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