Correlation Between Xp and Sprott Physical
Can any of the company-specific risk be diversified away by investing in both Xp 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 Xp and Sprott Physical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xp Inc and Sprott Physical Gold, you can compare the effects of market volatilities on Xp 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 Xp with a short position of Sprott Physical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xp and Sprott Physical.
Diversification Opportunities for Xp and Sprott Physical
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Xp and Sprott is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Xp Inc 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 Xp 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 Xp Inc 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 Xp i.e., Xp and Sprott Physical go up and down completely randomly.
Pair Corralation between Xp and Sprott Physical
Allowing for the 90-day total investment horizon Xp Inc is expected to under-perform the Sprott Physical. In addition to that, Xp is 1.93 times more volatile than Sprott Physical Gold. It trades about -0.2 of its total potential returns per unit of risk. Sprott Physical Gold is currently generating about -0.04 per unit of volatility. If you would invest 2,111 in Sprott Physical Gold on August 24, 2024 and sell it today you would lose (27.00) from holding Sprott Physical Gold or give up 1.28% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xp Inc vs. Sprott Physical Gold
Performance |
| Timeline |
| Xp Inc |
| Sprott Physical Gold |
Xp and Sprott Physical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xp and Sprott Physical
The main advantage of trading using opposite Xp and Sprott Physical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xp 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.| Xp vs. Up Fintech Holding | Xp vs. Bit Digital | Xp vs. Marathon Digital Holdings | Xp vs. MarketAxess Holdings |
| Sprott Physical vs. Sprott Physical Gold | Sprott Physical vs. Sprott Physical Platinum | Sprott Physical vs. Sprott Inc | Sprott Physical vs. Brookfield Real Assets |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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