Correlation Between SPDR SP and Sprott Nickel
Can any of the company-specific risk be diversified away by investing in both SPDR SP and Sprott Nickel 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 SPDR SP and Sprott Nickel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPDR SP Metals and Sprott Nickel Miners, you can compare the effects of market volatilities on SPDR SP and Sprott Nickel 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 SPDR SP with a short position of Sprott Nickel. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR SP and Sprott Nickel.
Diversification Opportunities for SPDR SP and Sprott Nickel
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SPDR and Sprott is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding SPDR SP Metals and Sprott Nickel Miners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sprott Nickel Miners and SPDR SP 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 SPDR SP Metals are associated (or correlated) with Sprott Nickel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sprott Nickel Miners has no effect on the direction of SPDR SP i.e., SPDR SP and Sprott Nickel go up and down completely randomly.
Pair Corralation between SPDR SP and Sprott Nickel
Considering the 90-day investment horizon SPDR SP Metals is expected to generate 1.13 times more return on investment than Sprott Nickel. However, SPDR SP is 1.13 times more volatile than Sprott Nickel Miners. It trades about 0.18 of its potential returns per unit of risk. Sprott Nickel Miners is currently generating about -0.19 per unit of risk. If you would invest 5,763 in SPDR SP Metals on November 2, 2024 and sell it today you would earn a total of 245.00 from holding SPDR SP Metals or generate 4.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.0% |
| Values | Daily Returns |
SPDR SP Metals vs. Sprott Nickel Miners
Performance |
| Timeline |
| SPDR SP Metals |
| Sprott Nickel Miners |
SPDR SP and Sprott Nickel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR SP and Sprott Nickel
The main advantage of trading using opposite SPDR SP and Sprott Nickel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR SP position performs unexpectedly, Sprott Nickel 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 Nickel will offset losses from the drop in Sprott Nickel's long position.| SPDR SP vs. Materials Select Sector | SPDR SP vs. SPDR SP Oil | SPDR SP vs. SPDR SP Retail | SPDR SP vs. SPDR SP Homebuilders |
| Sprott Nickel vs. Freedom Day Dividend | Sprott Nickel vs. Franklin Templeton ETF | Sprott Nickel vs. iShares MSCI China | Sprott Nickel vs. Tidal Trust II |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
Other Complementary Tools
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios |