Correlation Between Sprott Gold and Northern Small
Can any of the company-specific risk be diversified away by investing in both Sprott Gold and Northern Small 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 Northern Small 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 Northern Small Cap, you can compare the effects of market volatilities on Sprott Gold and Northern Small 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 Northern Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sprott Gold and Northern Small.
Diversification Opportunities for Sprott Gold and Northern Small
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Sprott and Northern is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Sprott Gold Equity and Northern Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Northern Small Cap 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 Northern Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Northern Small Cap has no effect on the direction of Sprott Gold i.e., Sprott Gold and Northern Small go up and down completely randomly.
Pair Corralation between Sprott Gold and Northern Small
Assuming the 90 days horizon Sprott Gold Equity is expected to generate 1.25 times more return on investment than Northern Small. However, Sprott Gold is 1.25 times more volatile than Northern Small Cap. It trades about 0.09 of its potential returns per unit of risk. Northern Small Cap is currently generating about 0.03 per unit of risk. If you would invest 3,908 in Sprott Gold Equity on October 18, 2024 and sell it today you would earn a total of 1,576 from holding Sprott Gold Equity or generate 40.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sprott Gold Equity vs. Northern Small Cap
Performance |
| Timeline |
| Sprott Gold Equity |
| Northern Small Cap |
Sprott Gold and Northern Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sprott Gold and Northern Small
The main advantage of trading using opposite Sprott Gold and Northern Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sprott Gold position performs unexpectedly, Northern Small 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 Northern Small will offset losses from the drop in Northern Small'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 |
| Northern Small vs. Invesco Technology Fund | Northern Small vs. Biotechnology Fund Class | Northern Small vs. Pgim Jennison Technology | Northern Small vs. Technology Ultrasector Profund |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
Other Complementary Tools
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets |