Correlation Between Sprott Physical and EHealth
Can any of the company-specific risk be diversified away by investing in both Sprott Physical and EHealth 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 Physical and EHealth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sprott Physical Gold and EHealth, you can compare the effects of market volatilities on Sprott Physical and EHealth 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 Physical with a short position of EHealth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sprott Physical and EHealth.
Diversification Opportunities for Sprott Physical and EHealth
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sprott and EHealth is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Sprott Physical Gold and EHealth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EHealth and Sprott Physical 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 Physical Gold are associated (or correlated) with EHealth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EHealth has no effect on the direction of Sprott Physical i.e., Sprott Physical and EHealth go up and down completely randomly.
Pair Corralation between Sprott Physical and EHealth
Considering the 90-day investment horizon Sprott Physical Gold is expected to generate 0.31 times more return on investment than EHealth. However, Sprott Physical Gold is 3.2 times less risky than EHealth. It trades about 0.41 of its potential returns per unit of risk. EHealth is currently generating about -0.13 per unit of risk. If you would invest 1,844 in Sprott Physical Gold on December 29, 2023 and sell it today you would earn a total of 163.00 from holding Sprott Physical Gold or generate 8.84% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Sprott Physical Gold vs. EHealth
Performance |
Timeline |
Sprott Physical Gold |
EHealth |
Sprott Physical and EHealth Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Sprott Physical and EHealth
The main advantage of trading using opposite Sprott Physical and EHealth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sprott Physical position performs unexpectedly, EHealth 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 EHealth will offset losses from the drop in EHealth's long position.Sprott Physical vs. VanEck Bitcoin Trust | Sprott Physical vs. Verizon Communications | Sprott Physical vs. The Boeing | Sprott Physical vs. The Travelers Companies |
EHealth vs. Ryanair Holdings PLC | EHealth vs. Western Midstream Partners | EHealth vs. Vistra Energy Corp | EHealth vs. Porvair Plc |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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