Correlation Between Sprott Gold and State Street
Can any of the company-specific risk be diversified away by investing in both Sprott Gold and State Street 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 State Street 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 State Street Aggregate, you can compare the effects of market volatilities on Sprott Gold and State Street 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 State Street. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sprott Gold and State Street.
Diversification Opportunities for Sprott Gold and State Street
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Sprott and State is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Sprott Gold Equity and State Street Aggregate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on State Street Aggregate 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 State Street. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of State Street Aggregate has no effect on the direction of Sprott Gold i.e., Sprott Gold and State Street go up and down completely randomly.
Pair Corralation between Sprott Gold and State Street
Assuming the 90 days horizon Sprott Gold Equity is expected to generate 5.33 times more return on investment than State Street. However, Sprott Gold is 5.33 times more volatile than State Street Aggregate. It trades about 0.09 of its potential returns per unit of risk. State Street Aggregate is currently generating about 0.06 per unit of risk. If you would invest 4,709 in Sprott Gold Equity on September 14, 2024 and sell it today you would earn a total of 870.00 from holding Sprott Gold Equity or generate 18.48% 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. State Street Aggregate
Performance |
| Timeline |
| Sprott Gold Equity |
| State Street Aggregate |
Sprott Gold and State Street Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sprott Gold and State Street
The main advantage of trading using opposite Sprott Gold and State Street positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sprott Gold position performs unexpectedly, State Street 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 State Street will offset losses from the drop in State Street's long position.| Sprott Gold vs. Deutsche Gold Precious | Sprott Gold vs. Money Market Obligations | Sprott Gold vs. Fidelity Focused Stock | Sprott Gold vs. Fidelity Contrafund K6 |
| State Street vs. Invesco Gold Special | State Street vs. Gabelli Gold Fund | State Street vs. Sprott Gold Equity | State Street vs. Great West Goldman Sachs |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
Other Complementary Tools
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Global Correlations Find global opportunities by holding instruments from different markets |