Correlation Between Sprott Gold and Amcap Fund
Can any of the company-specific risk be diversified away by investing in both Sprott Gold and Amcap Fund 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 Amcap Fund 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 Amcap Fund Class, you can compare the effects of market volatilities on Sprott Gold and Amcap Fund 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 Amcap Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sprott Gold and Amcap Fund.
Diversification Opportunities for Sprott Gold and Amcap Fund
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Sprott and Amcap is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Sprott Gold Equity and Amcap Fund Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amcap Fund Class 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 Amcap Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amcap Fund Class has no effect on the direction of Sprott Gold i.e., Sprott Gold and Amcap Fund go up and down completely randomly.
Pair Corralation between Sprott Gold and Amcap Fund
Assuming the 90 days horizon Sprott Gold Equity is expected to under-perform the Amcap Fund. In addition to that, Sprott Gold is 1.95 times more volatile than Amcap Fund Class. It trades about -0.22 of its total potential returns per unit of risk. Amcap Fund Class is currently generating about 0.11 per unit of volatility. If you would invest 3,600 in Amcap Fund Class on August 30, 2024 and sell it today you would earn a total of 77.00 from holding Amcap Fund Class or generate 2.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Sprott Gold Equity vs. Amcap Fund Class
Performance |
| Timeline |
| Sprott Gold Equity |
| Amcap Fund Class |
Sprott Gold and Amcap Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sprott Gold and Amcap Fund
The main advantage of trading using opposite Sprott Gold and Amcap Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sprott Gold position performs unexpectedly, Amcap Fund 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 Amcap Fund will offset losses from the drop in Amcap Fund's long position.| Sprott Gold vs. Sprott Junior Gold | Sprott Gold vs. Sprott Gold Miners | Sprott Gold vs. Europac Gold Fund | Sprott Gold vs. US Global GO |
| Amcap Fund vs. Heartland Value Plus | Amcap Fund vs. Mid Cap Growth Profund | Amcap Fund vs. Pace Smallmedium Value | Amcap Fund vs. Ab Discovery Value |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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