Correlation Between Sprott Physical and BMTC

Can any of the company-specific risk be diversified away by investing in both Sprott Physical and BMTC 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 BMTC 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 BMTC Group, you can compare the effects of market volatilities on Sprott Physical and BMTC 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 BMTC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sprott Physical and BMTC.

Diversification Opportunities for Sprott Physical and BMTC

-0.58

Correlation Coefficient

Sprott Physical  BMTC

Excellent diversification

The 3 months correlation between Sprott and BMTC is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Sprott Physical Gold and BMTC Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BMTC Group 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 BMTC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BMTC Group has no effect on the direction of Sprott Physical i.e., Sprott Physical and BMTC go up and down completely randomly.

Pair Corralation between Sprott Physical and BMTC

Assuming the 90 days trading horizon Sprott Physical Gold is expected to generate 0.75 times more return on investment than BMTC. However, Sprott Physical Gold is 1.32 times less risky than BMTC. It trades about 0.34 of its potential returns per unit of risk. BMTC Group is currently generating about -0.06 per unit of risk. If you would invest  3,092  in Sprott Physical Gold on July 16, 2025 and sell it today you would earn a total of  752.00  from holding Sprott Physical Gold or generate 24.32% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Sprott Physical Gold  vs.  BMTC Group

Sprott Physical Gold

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Sprott Physical Gold are ranked lower than 27 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Sprott Physical unveiled solid returns over the last few months and may actually be approaching a breakup point.

BMTC Group

Risk-Adjusted Performance

Weakest

Over the last 90 days BMTC Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, BMTC is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Sprott Physical and BMTC

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

The idea behind Sprott Physical Gold and BMTC Group 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.