Correlation Between Sprott Gold and Global Gold
Can any of the company-specific risk be diversified away by investing in both Sprott Gold and Global Gold 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 Gold and Global Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sprott Gold Equity and Global Gold Fund, you can compare the effects of market volatilities on Sprott Gold and Global Gold 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 Gold with a short position of Global Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sprott Gold and Global Gold.
Diversification Opportunities for Sprott Gold and Global Gold
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Sprott and Global is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Sprott Gold Equity and Global Gold Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Gold Fund and Sprott Gold 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 Gold Equity are associated (or correlated) with Global Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Gold Fund has no effect on the direction of Sprott Gold i.e., Sprott Gold and Global Gold go up and down completely randomly.
Pair Corralation between Sprott Gold and Global Gold
Assuming the 90 days horizon Sprott Gold Equity is expected to generate 0.96 times more return on investment than Global Gold. However, Sprott Gold Equity is 1.04 times less risky than Global Gold. It trades about -0.26 of its potential returns per unit of risk. Global Gold Fund is currently generating about -0.29 per unit of risk. If you would invest 6,182 in Sprott Gold Equity on August 24, 2024 and sell it today you would lose (649.00) from holding Sprott Gold Equity or give up 10.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sprott Gold Equity vs. Global Gold Fund
Performance |
| Timeline |
| Sprott Gold Equity |
| Global Gold Fund |
Sprott Gold and Global Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sprott Gold and Global Gold
The main advantage of trading using opposite Sprott Gold and Global Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sprott Gold position performs unexpectedly, Global Gold 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 Global Gold will offset losses from the drop in Global Gold's long position.| Sprott Gold vs. First Eagle Gold | Sprott Gold vs. First Eagle Gold | Sprott Gold vs. First Eagle Gold | Sprott Gold vs. Oppenheimer Gold Spec |
| Global Gold vs. First Eagle Gold | Global Gold vs. First Eagle Gold | Global Gold vs. First Eagle Gold | Global Gold vs. Oppenheimer Gold Spec |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
Other Complementary Tools
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Stocks Directory Find actively traded stocks across global markets | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital |