Correlation Between Sprott Junior and VanEck Agribusiness
Can any of the company-specific risk be diversified away by investing in both Sprott Junior and VanEck Agribusiness 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 Junior and VanEck Agribusiness into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sprott Junior Uranium and VanEck Agribusiness ETF, you can compare the effects of market volatilities on Sprott Junior and VanEck Agribusiness 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 Junior with a short position of VanEck Agribusiness. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sprott Junior and VanEck Agribusiness.
Diversification Opportunities for Sprott Junior and VanEck Agribusiness
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sprott and VanEck is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Sprott Junior Uranium and VanEck Agribusiness ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VanEck Agribusiness ETF and Sprott Junior 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 Junior Uranium are associated (or correlated) with VanEck Agribusiness. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VanEck Agribusiness ETF has no effect on the direction of Sprott Junior i.e., Sprott Junior and VanEck Agribusiness go up and down completely randomly.
Pair Corralation between Sprott Junior and VanEck Agribusiness
Given the investment horizon of 90 days Sprott Junior Uranium is expected to under-perform the VanEck Agribusiness. In addition to that, Sprott Junior is 3.98 times more volatile than VanEck Agribusiness ETF. It trades about -0.13 of its total potential returns per unit of risk. VanEck Agribusiness ETF is currently generating about 0.0 per unit of volatility. If you would invest 6,764 in VanEck Agribusiness ETF on November 18, 2024 and sell it today you would lose (2.00) from holding VanEck Agribusiness ETF or give up 0.03% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sprott Junior Uranium vs. VanEck Agribusiness ETF
Performance |
| Timeline |
| Sprott Junior Uranium |
| VanEck Agribusiness ETF |
Sprott Junior and VanEck Agribusiness Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sprott Junior and VanEck Agribusiness
The main advantage of trading using opposite Sprott Junior and VanEck Agribusiness positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sprott Junior position performs unexpectedly, VanEck Agribusiness 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 VanEck Agribusiness will offset losses from the drop in VanEck Agribusiness' long position.| Sprott Junior vs. Sprott Junior Copper | Sprott Junior vs. Sprott Energy Transition | Sprott Junior vs. Sprott Lithium Miners | Sprott Junior vs. Sprott Uranium Miners |
| VanEck Agribusiness vs. Invesco DB Agriculture | VanEck Agribusiness vs. Invesco DB Commodity | VanEck Agribusiness vs. VanEck Steel ETF | VanEck Agribusiness vs. SPDR SP Metals |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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