Correlation Between Sprott Silver and First Trust

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

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

Diversification Opportunities for Sprott Silver and First Trust

0.02

Correlation Coefficient

Sprott Silver  First Trust

Significant diversification

The 3 months correlation between Sprott and First is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Sprott Silver Miners and First Trust Exchange Traded in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Trust Exchange and Sprott Silver 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 Silver Miners are associated (or correlated) with First Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Trust Exchange has no effect on the direction of Sprott Silver i.e., Sprott Silver and First Trust go up and down completely randomly.

Pair Corralation between Sprott Silver and First Trust

Given the investment horizon of 90 days Sprott Silver Miners is expected to generate 2.26 times more return on investment than First Trust. However, Sprott Silver is 2.26 times more volatile than First Trust Exchange Traded. It trades about 0.25 of its potential returns per unit of risk. First Trust Exchange Traded is currently generating about 0.0 per unit of risk. If you would invest  2,380  in Sprott Silver Miners on May 15, 2025 and sell it today you would earn a total of  940.00  from holding Sprott Silver Miners or generate 39.5% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.39%
Values	Daily Returns

Sprott Silver Miners  vs.  First Trust Exchange Traded

Sprott Silver Miners

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Sprott Silver Miners are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Sprott Silver reported solid returns over the last few months and may actually be approaching a breakup point.

First Trust Exchange

Risk-Adjusted Performance

Weakest

Over the last 90 days First Trust Exchange Traded has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable technical and fundamental indicators, First Trust is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Sprott Silver and First Trust

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

The idea behind Sprott Silver Miners and First Trust Exchange Traded 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.