Correlation Between Sprott Gold and Mainstay Cornerstone
Can any of the company-specific risk be diversified away by investing in both Sprott Gold and Mainstay Cornerstone 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 Mainstay Cornerstone 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 Mainstay Nerstone Growth, you can compare the effects of market volatilities on Sprott Gold and Mainstay Cornerstone 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 Mainstay Cornerstone. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sprott Gold and Mainstay Cornerstone.
Diversification Opportunities for Sprott Gold and Mainstay Cornerstone
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Sprott and Mainstay is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Sprott Gold Equity and Mainstay Nerstone Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainstay Nerstone Growth 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 Mainstay Cornerstone. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mainstay Nerstone Growth has no effect on the direction of Sprott Gold i.e., Sprott Gold and Mainstay Cornerstone go up and down completely randomly.
Pair Corralation between Sprott Gold and Mainstay Cornerstone
Assuming the 90 days horizon Sprott Gold Equity is expected to generate 1.29 times more return on investment than Mainstay Cornerstone. However, Sprott Gold is 1.29 times more volatile than Mainstay Nerstone Growth. It trades about 0.05 of its potential returns per unit of risk. Mainstay Nerstone Growth is currently generating about 0.05 per unit of risk. If you would invest 4,736 in Sprott Gold Equity on January 13, 2025 and sell it today you would earn a total of 2,183 from holding Sprott Gold Equity or generate 46.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sprott Gold Equity vs. Mainstay Nerstone Growth
Performance |
| Timeline |
| Sprott Gold Equity |
| Mainstay Nerstone Growth |
Sprott Gold and Mainstay Cornerstone Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sprott Gold and Mainstay Cornerstone
The main advantage of trading using opposite Sprott Gold and Mainstay Cornerstone positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sprott Gold position performs unexpectedly, Mainstay Cornerstone 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 Mainstay Cornerstone will offset losses from the drop in Mainstay Cornerstone'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 |
| Mainstay Cornerstone vs. Mainstay Large Cap | Mainstay Cornerstone vs. Mainstay Large Cap | Mainstay Cornerstone vs. Mainstay Winslow Large | Mainstay Cornerstone vs. Mainstay High Yield |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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