Correlation Between Cm Commodity and Sprott Gold

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

By analyzing existing cross correlation between Cm Modity Index and Sprott Gold Equity, you can compare the effects of market volatilities on Cm Commodity and Sprott Gold 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 Cm Commodity with a short position of Sprott Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cm Commodity and Sprott Gold.

Diversification Opportunities for Cm Commodity and Sprott Gold

0.23

Correlation Coefficient

Cm Commodity  Sprott Gold

Modest diversification

The 3 months correlation between COMIX and Sprott is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Cm Modity Index and Sprott Gold Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sprott Gold Equity and Cm Commodity 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 Cm Modity Index are associated (or correlated) with Sprott Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sprott Gold Equity has no effect on the direction of Cm Commodity i.e., Cm Commodity and Sprott Gold go up and down completely randomly.

Pair Corralation between Cm Commodity and Sprott Gold

Assuming the 90 days horizon Cm Commodity is expected to generate 12.29 times less return on investment than Sprott Gold. But when comparing it to its historical volatility, Cm Modity Index is 2.52 times less risky than Sprott Gold. It trades about 0.02 of its potential returns per unit of risk. Sprott Gold Equity is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  7,266  in Sprott Gold Equity on May 22, 2025 and sell it today you would earn a total of  810.00  from holding Sprott Gold Equity or generate 11.15% return on investment over 90 days.

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

Cm Modity Index  vs.  Sprott Gold Equity

Cm Modity Index

Risk-Adjusted Performance

Weakest

Compared to the overall equity markets, risk-adjusted returns on investments in Cm Modity Index are ranked lower than 1 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Cm Commodity is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Sprott Gold Equity

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Sprott Gold Equity are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly sluggish essential indicators, Sprott Gold may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Cm Commodity and Sprott Gold

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

The idea behind Cm Modity Index and Sprott Gold Equity 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.

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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.