Correlation Between Sprott Gold and US Global
Can any of the company-specific risk be diversified away by investing in both Sprott Gold and US Global 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 US Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sprott Gold Miners and US Global GO, you can compare the effects of market volatilities on Sprott Gold and US Global 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 US Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sprott Gold and US Global.
Diversification Opportunities for Sprott Gold and US Global
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Sprott and GOAU is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Sprott Gold Miners and US Global GO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on US Global GO 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 Miners are associated (or correlated) with US Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of US Global GO has no effect on the direction of Sprott Gold i.e., Sprott Gold and US Global go up and down completely randomly.
Pair Corralation between Sprott Gold and US Global
Given the investment horizon of 90 days Sprott Gold Miners is expected to generate 0.88 times more return on investment than US Global. However, Sprott Gold Miners is 1.14 times less risky than US Global. It trades about 0.19 of its potential returns per unit of risk. US Global GO is currently generating about 0.15 per unit of risk. If you would invest 2,796 in Sprott Gold Miners on October 24, 2024 and sell it today you would earn a total of 149.00 from holding Sprott Gold Miners or generate 5.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sprott Gold Miners vs. US Global GO
Performance |
| Timeline |
| Sprott Gold Miners |
| US Global GO |
Sprott Gold and US Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sprott Gold and US Global
The main advantage of trading using opposite Sprott Gold and US Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sprott Gold position performs unexpectedly, US Global 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 US Global will offset losses from the drop in US Global's long position.| Sprott Gold vs. Sprott Junior Gold | Sprott Gold vs. iShares MSCI Global | Sprott Gold vs. US Global GO | Sprott Gold vs. Sprott Physical Gold |
| US Global vs. Sprott Gold Miners | US Global vs. Global X Gold | US Global vs. Sprott Junior Gold | US Global vs. Amplify ETF Trust |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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