Correlation Between Sprott and IShares Silver
Can any of the company-specific risk be diversified away by investing in both Sprott and IShares Silver 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 and IShares Silver into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sprott Inc and iShares Silver Trust, you can compare the effects of market volatilities on Sprott and IShares Silver 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 with a short position of IShares Silver. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sprott and IShares Silver.
Diversification Opportunities for Sprott and IShares Silver
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Sprott and IShares is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Sprott Inc and iShares Silver Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Silver Trust and Sprott 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 Inc are associated (or correlated) with IShares Silver. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Silver Trust has no effect on the direction of Sprott i.e., Sprott and IShares Silver go up and down completely randomly.
Pair Corralation between Sprott and IShares Silver
Considering the 90-day investment horizon Sprott Inc is expected to generate 0.98 times more return on investment than IShares Silver. However, Sprott Inc is 1.02 times less risky than IShares Silver. It trades about 0.09 of its potential returns per unit of risk. iShares Silver Trust is currently generating about 0.07 per unit of risk. If you would invest 3,136 in Sprott Inc on September 12, 2024 and sell it today you would earn a total of 1,417 from holding Sprott Inc or generate 45.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sprott Inc vs. iShares Silver Trust
Performance |
| Timeline |
| Sprott Inc |
| iShares Silver Trust |
Sprott and IShares Silver Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sprott and IShares Silver
The main advantage of trading using opposite Sprott and IShares Silver positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sprott position performs unexpectedly, IShares Silver 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 IShares Silver will offset losses from the drop in IShares Silver's long position.| Sprott vs. Invesco Quality Municipal | Sprott vs. Invesco Municipal Income | Sprott vs. DWS Municipal Income | Sprott vs. Eaton Vance Municipal |
| IShares Silver vs. SPDR Gold Shares | IShares Silver vs. VanEck Gold Miners | IShares Silver vs. United States Oil | IShares Silver vs. iShares Gold 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 Global Correlations module to find global opportunities by holding instruments from different markets.
Other Complementary Tools
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets |