Correlation Between Sprott Junior and Sprott Junior

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

By analyzing existing cross correlation between Sprott Junior Uranium and Sprott Junior Copper, you can compare the effects of market volatilities on Sprott Junior and Sprott Junior 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 Sprott Junior. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sprott Junior and Sprott Junior.

Diversification Opportunities for Sprott Junior and Sprott Junior

0.77

Correlation Coefficient

Sprott Junior  Sprott Junior

Poor diversification

The 3 months correlation between Sprott and Sprott is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Sprott Junior Uranium and Sprott Junior Copper in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sprott Junior Copper 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 Uranium are associated (or correlated) with Sprott Junior. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sprott Junior Copper has no effect on the direction of Sprott Junior i.e., Sprott Junior and Sprott Junior go up and down completely randomly.

Pair Corralation between Sprott Junior and Sprott Junior

Given the investment horizon of 90 days Sprott Junior Uranium is expected to under-perform the Sprott Junior. In addition to that, Sprott Junior is 1.63 times more volatile than Sprott Junior Copper. It trades about -0.03 of its total potential returns per unit of risk. Sprott Junior Copper is currently generating about -0.04 per unit of volatility. If you would invest  2,266  in Sprott Junior Copper on August 25, 2024 and sell it today you would lose (46.00) from holding Sprott Junior Copper or give up 2.03% of portfolio value over 90 days.

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

Sprott Junior Uranium  vs.  Sprott Junior Copper

Sprott Junior Uranium

Risk-Adjusted Performance

6 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Sprott Junior Uranium are ranked lower than 6 (%) 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.

Sprott Junior Copper

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Sprott Junior Copper are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Even with relatively steady basic indicators, Sprott Junior is not utilizing all of its potentials. The current stock price chaos, may contribute to medium-term losses for the stakeholders.

Pair Trading with Sprott Junior and Sprott Junior

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

The idea behind Sprott Junior Uranium and Sprott Junior Copper 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.