Correlation Between Sprott Gold and Touchstone Small
Can any of the company-specific risk be diversified away by investing in both Sprott Gold and Touchstone 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 Touchstone 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 Touchstone Small Cap, you can compare the effects of market volatilities on Sprott Gold and Touchstone 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 Touchstone Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sprott Gold and Touchstone Small.
Diversification Opportunities for Sprott Gold and Touchstone Small
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sprott and Touchstone is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Sprott Gold Equity and Touchstone Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Touchstone 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 Touchstone Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Touchstone Small Cap has no effect on the direction of Sprott Gold i.e., Sprott Gold and Touchstone Small go up and down completely randomly.
Pair Corralation between Sprott Gold and Touchstone Small
Assuming the 90 days horizon Sprott Gold Equity is expected to generate 1.5 times more return on investment than Touchstone Small. However, Sprott Gold is 1.5 times more volatile than Touchstone Small Cap. It trades about 0.33 of its potential returns per unit of risk. Touchstone Small Cap is currently generating about 0.15 per unit of risk. If you would invest 5,299 in Sprott Gold Equity on November 4, 2024 and sell it today you would earn a total of 482.00 from holding Sprott Gold Equity or generate 9.1% 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. Touchstone Small Cap
Performance |
| Timeline |
| Sprott Gold Equity |
| Touchstone Small Cap |
Sprott Gold and Touchstone Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sprott Gold and Touchstone Small
The main advantage of trading using opposite Sprott Gold and Touchstone Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sprott Gold position performs unexpectedly, Touchstone 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 Touchstone Small will offset losses from the drop in Touchstone 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 |
| Touchstone Small vs. The Hartford High | Touchstone Small vs. Needham Aggressive Growth | Touchstone Small vs. Artisan High Income | Touchstone Small vs. Chartwell Short Duration |
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 Stocks Directory module to find actively traded stocks across global markets.
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