Correlation Between Sprott Physical and US Global
Can any of the company-specific risk be diversified away by investing in both Sprott Physical 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 Physical 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 Physical Platinum and US Global GO, you can compare the effects of market volatilities on Sprott Physical 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 Physical with a short position of US Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sprott Physical and US Global.
Diversification Opportunities for Sprott Physical and US Global
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Sprott and GOAU is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Sprott Physical Platinum 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 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 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 Physical i.e., Sprott Physical and US Global go up and down completely randomly.
Pair Corralation between Sprott Physical and US Global
Given the investment horizon of 90 days Sprott Physical Platinum is expected to generate 0.92 times more return on investment than US Global. However, Sprott Physical Platinum is 1.09 times less risky than US Global. It trades about -0.09 of its potential returns per unit of risk. US Global GO is currently generating about -0.17 per unit of risk. If you would invest 1,033 in Sprott Physical Platinum on August 24, 2024 and sell it today you would lose (47.00) from holding Sprott Physical Platinum or give up 4.55% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sprott Physical Platinum vs. US Global GO
Performance |
| Timeline |
| Sprott Physical Platinum |
| US Global GO |
Sprott Physical and US Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sprott Physical and US Global
The main advantage of trading using opposite Sprott Physical and US Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sprott Physical 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 Physical vs. Sprott Physical Gold | Sprott Physical vs. Sprott Physical Silver | Sprott Physical vs. Sprott Inc | Sprott Physical vs. BlackRock ESG Capital |
| US Global vs. VanEck Junior Gold | US Global vs. iShares Silver Trust | US Global vs. SPDR Gold Shares | US Global vs. Newmont Goldcorp Corp |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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