Correlation Between Sprott Gold and Strategic Asset
Can any of the company-specific risk be diversified away by investing in both Sprott Gold and Strategic Asset 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 Strategic Asset 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 Strategic Asset Management, you can compare the effects of market volatilities on Sprott Gold and Strategic Asset 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 Strategic Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sprott Gold and Strategic Asset.
Diversification Opportunities for Sprott Gold and Strategic Asset
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sprott and Strategic is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Sprott Gold Equity and Strategic Asset Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Strategic Asset Mana 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 Strategic Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Strategic Asset Mana has no effect on the direction of Sprott Gold i.e., Sprott Gold and Strategic Asset go up and down completely randomly.
Pair Corralation between Sprott Gold and Strategic Asset
Assuming the 90 days horizon Sprott Gold Equity is expected to generate 1.79 times more return on investment than Strategic Asset. However, Sprott Gold is 1.79 times more volatile than Strategic Asset Management. It trades about 0.24 of its potential returns per unit of risk. Strategic Asset Management is currently generating about 0.18 per unit of risk. If you would invest 5,152 in Sprott Gold Equity on October 20, 2024 and sell it today you would earn a total of 317.00 from holding Sprott Gold Equity or generate 6.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sprott Gold Equity vs. Strategic Asset Management
Performance |
| Timeline |
| Sprott Gold Equity |
| Strategic Asset Mana |
Sprott Gold and Strategic Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sprott Gold and Strategic Asset
The main advantage of trading using opposite Sprott Gold and Strategic Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sprott Gold position performs unexpectedly, Strategic Asset 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 Strategic Asset will offset losses from the drop in Strategic Asset'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 |
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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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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