Correlation Between Wilmington Capital and Sprott Physical
Can any of the company-specific risk be diversified away by investing in both Wilmington Capital and Sprott Physical 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 Wilmington Capital and Sprott Physical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wilmington Capital Management and Sprott Physical Gold, you can compare the effects of market volatilities on Wilmington Capital and Sprott Physical 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 Wilmington Capital with a short position of Sprott Physical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wilmington Capital and Sprott Physical.
Diversification Opportunities for Wilmington Capital and Sprott Physical
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Wilmington and Sprott is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Wilmington Capital Management and Sprott Physical Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sprott Physical Gold and Wilmington Capital 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 Wilmington Capital Management are associated (or correlated) with Sprott Physical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sprott Physical Gold has no effect on the direction of Wilmington Capital i.e., Wilmington Capital and Sprott Physical go up and down completely randomly.
Pair Corralation between Wilmington Capital and Sprott Physical
Assuming the 90 days trading horizon Wilmington Capital Management is expected to under-perform the Sprott Physical. But the stock apears to be less risky and, when comparing its historical volatility, Wilmington Capital Management is 12.4 times less risky than Sprott Physical. The stock trades about -0.21 of its potential returns per unit of risk. The Sprott Physical Gold is currently generating about 0.32 of returns per unit of risk over similar time horizon. If you would invest 2,381 in Sprott Physical Gold on November 3, 2024 and sell it today you would earn a total of 201.00 from holding Sprott Physical Gold or generate 8.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wilmington Capital Management vs. Sprott Physical Gold
Performance |
| Timeline |
| Wilmington Capital |
| Sprott Physical Gold |
Wilmington Capital and Sprott Physical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wilmington Capital and Sprott Physical
The main advantage of trading using opposite Wilmington Capital and Sprott Physical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wilmington Capital position performs unexpectedly, Sprott Physical 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 Sprott Physical will offset losses from the drop in Sprott Physical's long position.| Wilmington Capital vs. 2028 Investment Grade | Wilmington Capital vs. NeXGold Mining Corp | Wilmington Capital vs. Atrium Mortgage Investment | Wilmington Capital vs. Westshore Terminals Investment |
| Sprott Physical vs. Costco Wholesale Corp | Sprott Physical vs. McEwen Mining | Sprott Physical vs. Quorum Information Technologies | Sprott Physical vs. Mako Mining 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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