Correlation Between Sprott Gold and Aberdeen Equity
Can any of the company-specific risk be diversified away by investing in both Sprott Gold and Aberdeen Equity 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 Aberdeen Equity 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 Aberdeen Equity A, you can compare the effects of market volatilities on Sprott Gold and Aberdeen Equity 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 Aberdeen Equity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sprott Gold and Aberdeen Equity.
Diversification Opportunities for Sprott Gold and Aberdeen Equity
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Sprott and Aberdeen is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Sprott Gold Equity and Aberdeen Equity A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aberdeen Equity A 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 Aberdeen Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aberdeen Equity A has no effect on the direction of Sprott Gold i.e., Sprott Gold and Aberdeen Equity go up and down completely randomly.
Pair Corralation between Sprott Gold and Aberdeen Equity
Assuming the 90 days horizon Sprott Gold Equity is expected to generate 2.11 times more return on investment than Aberdeen Equity. However, Sprott Gold is 2.11 times more volatile than Aberdeen Equity A. It trades about 0.12 of its potential returns per unit of risk. Aberdeen Equity A is currently generating about 0.1 per unit of risk. If you would invest 5,438 in Sprott Gold Equity on September 12, 2024 and sell it today you would earn a total of 221.00 from holding Sprott Gold Equity or generate 4.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Sprott Gold Equity vs. Aberdeen Equity A
Performance |
| Timeline |
| Sprott Gold Equity |
| Aberdeen Equity A |
Sprott Gold and Aberdeen Equity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sprott Gold and Aberdeen Equity
The main advantage of trading using opposite Sprott Gold and Aberdeen Equity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sprott Gold position performs unexpectedly, Aberdeen Equity 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 Aberdeen Equity will offset losses from the drop in Aberdeen Equity'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 |
| Aberdeen Equity vs. Vanguard Financials Index | Aberdeen Equity vs. Icon Financial Fund | Aberdeen Equity vs. Fidelity Advisor Financial | Aberdeen Equity vs. Goldman Sachs Financial |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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