Correlation Between Sprott Junior and IShares Core

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

By analyzing existing cross correlation between Sprott Junior Copper and iShares Core SP, you can compare the effects of market volatilities on Sprott Junior and IShares Core 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 Junior with a short position of IShares Core. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sprott Junior and IShares Core.

Diversification Opportunities for Sprott Junior and IShares Core

0.9

Correlation Coefficient

Sprott Junior  IShares Core

Almost no diversification

The 3 months correlation between Sprott and IShares is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Sprott Junior Copper and iShares Core SP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Core SP and Sprott Junior 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 Junior Copper are associated (or correlated) with IShares Core. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Core SP has no effect on the direction of Sprott Junior i.e., Sprott Junior and IShares Core go up and down completely randomly.

Pair Corralation between Sprott Junior and IShares Core

Given the investment horizon of 90 days Sprott Junior Copper is expected to generate 2.09 times more return on investment than IShares Core. However, Sprott Junior is 2.09 times more volatile than iShares Core SP. It trades about 0.21 of its potential returns per unit of risk. iShares Core SP is currently generating about 0.27 per unit of risk. If you would invest  2,072  in Sprott Junior Copper on May 6, 2025 and sell it today you would earn a total of  452.00  from holding Sprott Junior Copper or generate 21.81% return on investment over 90 days.

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

Sprott Junior Copper  vs.  iShares Core SP

Sprott Junior Copper

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Sprott Junior Copper are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Sprott Junior revealed solid returns over the last few months and may actually be approaching a breakup point.

iShares Core SP

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in iShares Core SP are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. In spite of fairly inconsistent basic indicators, IShares Core showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Sprott Junior and IShares Core

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

The idea behind Sprott Junior Copper and iShares Core SP 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.