Correlation Between Sprott Uranium and ProShares Smart

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

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

Diversification Opportunities for Sprott Uranium and ProShares Smart

0.88

Correlation Coefficient

Sprott Uranium  ProShares Smart

Very poor diversification

The 3 months correlation between Sprott and ProShares is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Sprott Uranium Miners and ProShares Smart Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares Smart Materials and Sprott Uranium 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 Uranium Miners are associated (or correlated) with ProShares Smart. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProShares Smart Materials has no effect on the direction of Sprott Uranium i.e., Sprott Uranium and ProShares Smart go up and down completely randomly.

Pair Corralation between Sprott Uranium and ProShares Smart

Given the investment horizon of 90 days Sprott Uranium Miners is expected to generate 2.28 times more return on investment than ProShares Smart. However, Sprott Uranium is 2.28 times more volatile than ProShares Smart Materials. It trades about 0.17 of its potential returns per unit of risk. ProShares Smart Materials is currently generating about 0.15 per unit of risk. If you would invest  3,600  in Sprott Uranium Miners on May 2, 2025 and sell it today you would earn a total of  1,040  from holding Sprott Uranium Miners or generate 28.89% return on investment over 90 days.

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

Sprott Uranium Miners  vs.  ProShares Smart Materials

Sprott Uranium Miners

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Sprott Uranium Miners are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Sprott Uranium displayed solid returns over the last few months and may actually be approaching a breakup point.

ProShares Smart Materials

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in ProShares Smart Materials are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, ProShares Smart may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Sprott Uranium and ProShares Smart

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

The idea behind Sprott Uranium Miners and ProShares Smart Materials 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.