Correlation Between Sprott Physical and Guardian Capital
Can any of the company-specific risk be diversified away by investing in both Sprott Physical and Guardian Capital 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 Physical and Guardian Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sprott Physical Platinum and Guardian Capital Group, you can compare the effects of market volatilities on Sprott Physical and Guardian Capital 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 Physical with a short position of Guardian Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sprott Physical and Guardian Capital.
Diversification Opportunities for Sprott Physical and Guardian Capital
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sprott and Guardian is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Sprott Physical Platinum and Guardian Capital Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guardian Capital and Sprott Physical 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 Physical Platinum are associated (or correlated) with Guardian Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guardian Capital has no effect on the direction of Sprott Physical i.e., Sprott Physical and Guardian Capital go up and down completely randomly.
Pair Corralation between Sprott Physical and Guardian Capital
Assuming the 90 days trading horizon Sprott Physical Platinum is expected to under-perform the Guardian Capital. But the stock apears to be less risky and, when comparing its historical volatility, Sprott Physical Platinum is 1.28 times less risky than Guardian Capital. The stock trades about -0.25 of its potential returns per unit of risk. The Guardian Capital Group is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 4,074 in Guardian Capital Group on September 5, 2024 and sell it today you would earn a total of 91.00 from holding Guardian Capital Group or generate 2.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sprott Physical Platinum vs. Guardian Capital Group
Performance |
| Timeline |
| Sprott Physical Platinum |
| Guardian Capital |
Sprott Physical and Guardian Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sprott Physical and Guardian Capital
The main advantage of trading using opposite Sprott Physical and Guardian Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sprott Physical position performs unexpectedly, Guardian Capital 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 Guardian Capital will offset losses from the drop in Guardian Capital's long position.| Sprott Physical vs. iShares Canadian HYBrid | Sprott Physical vs. Altagas Cum Red | Sprott Physical vs. European Residential Real | Sprott Physical vs. iShares Fundamental Hedged |
| Guardian Capital vs. Guardian Capital Group | Guardian Capital vs. Andrew Peller Limited | Guardian Capital vs. K Bro Linen | Guardian Capital vs. AGF Management Limited |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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