Correlation Between Exchange Traded and Sprott Focus

Can any of the company-specific risk be diversified away by investing in both Exchange Traded and Sprott Focus 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 Exchange Traded and Sprott Focus into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Exchange Traded Concepts and Sprott Focus Trust, you can compare the effects of market volatilities on Exchange Traded and Sprott Focus 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 Exchange Traded with a short position of Sprott Focus. Check out your portfolio center. Please also check ongoing floating volatility patterns of Exchange Traded and Sprott Focus.

Diversification Opportunities for Exchange Traded and Sprott Focus

0.81

Correlation Coefficient

Exchange Traded  Sprott Focus

Very poor diversification

The 3 months correlation between Exchange and Sprott is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Exchange Traded Concepts and Sprott Focus Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sprott Focus Trust and Exchange Traded 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 Exchange Traded Concepts are associated (or correlated) with Sprott Focus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sprott Focus Trust has no effect on the direction of Exchange Traded i.e., Exchange Traded and Sprott Focus go up and down completely randomly.

Pair Corralation between Exchange Traded and Sprott Focus

Given the investment horizon of 90 days Exchange Traded is expected to generate 1.32 times less return on investment than Sprott Focus. But when comparing it to its historical volatility, Exchange Traded Concepts is 1.16 times less risky than Sprott Focus. It trades about 0.14 of its potential returns per unit of risk. Sprott Focus Trust is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  781.00  in Sprott Focus Trust on August 14, 2025 and sell it today you would earn a total of  63.00  from holding Sprott Focus Trust or generate 8.07% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

Exchange Traded Concepts  vs.  Sprott Focus Trust

Exchange Traded Concepts

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Exchange Traded Concepts are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Exchange Traded is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Sprott Focus Trust

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Sprott Focus Trust are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak basic indicators, Sprott Focus may actually be approaching a critical reversion point that can send shares even higher in December 2025.

Pair Trading with Exchange Traded and Sprott Focus

The main advantage of trading using opposite Exchange Traded and Sprott Focus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Exchange Traded position performs unexpectedly, Sprott Focus 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 Focus will offset losses from the drop in Sprott Focus' long position.

The idea behind Exchange Traded Concepts and Sprott Focus Trust pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.