Correlation Between Sprott Uranium and Amplify Lithium
Can any of the company-specific risk be diversified away by investing in both Sprott Uranium and Amplify Lithium 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 Uranium and Amplify Lithium into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sprott Uranium Miners and Amplify Lithium Battery, you can compare the effects of market volatilities on Sprott Uranium and Amplify Lithium 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 Uranium with a short position of Amplify Lithium. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sprott Uranium and Amplify Lithium.
Diversification Opportunities for Sprott Uranium and Amplify Lithium
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sprott and Amplify is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Sprott Uranium Miners and Amplify Lithium Battery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amplify Lithium Battery and Sprott Uranium 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 Uranium Miners are associated (or correlated) with Amplify Lithium. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amplify Lithium Battery has no effect on the direction of Sprott Uranium i.e., Sprott Uranium and Amplify Lithium go up and down completely randomly.
Pair Corralation between Sprott Uranium and Amplify Lithium
Given the investment horizon of 90 days Sprott Uranium Miners is expected to under-perform the Amplify Lithium. In addition to that, Sprott Uranium is 1.38 times more volatile than Amplify Lithium Battery. It trades about -0.07 of its total potential returns per unit of risk. Amplify Lithium Battery is currently generating about -0.04 per unit of volatility. If you would invest 964.00 in Amplify Lithium Battery on August 28, 2024 and sell it today you would lose (17.00) from holding Amplify Lithium Battery or give up 1.76% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sprott Uranium Miners vs. Amplify Lithium Battery
Performance |
| Timeline |
| Sprott Uranium Miners |
| Amplify Lithium Battery |
Sprott Uranium and Amplify Lithium Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sprott Uranium and Amplify Lithium
The main advantage of trading using opposite Sprott Uranium and Amplify Lithium positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sprott Uranium position performs unexpectedly, Amplify Lithium 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 Amplify Lithium will offset losses from the drop in Amplify Lithium's long position.| Sprott Uranium vs. Global X Uranium | Sprott Uranium vs. Sprott Physical Uranium | Sprott Uranium vs. Energy Fuels | Sprott Uranium vs. NexGen Energy |
| Amplify Lithium vs. KraneShares Electric Vehicles | Amplify Lithium vs. iShares Self Driving EV | Amplify Lithium vs. SPDR SP Kensho | Amplify Lithium vs. Global X Lithium |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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