Correlation Between Guru Organic and Sprott Physical

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

By analyzing existing cross correlation between Guru Organic Energy and Sprott Physical Platinum, you can compare the effects of market volatilities on Guru Organic and Sprott Physical 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 Guru Organic with a short position of Sprott Physical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guru Organic and Sprott Physical.

Diversification Opportunities for Guru Organic and Sprott Physical

-0.45

Correlation Coefficient

Guru Organic  Sprott Physical

Very good diversification

The 3 months correlation between Guru and Sprott is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Guru Organic Energy and Sprott Physical Platinum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sprott Physical Platinum and Guru Organic 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 Guru Organic Energy are associated (or correlated) with Sprott Physical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sprott Physical Platinum has no effect on the direction of Guru Organic i.e., Guru Organic and Sprott Physical go up and down completely randomly.

Pair Corralation between Guru Organic and Sprott Physical

Assuming the 90 days trading horizon Guru Organic is expected to generate 74.8 times less return on investment than Sprott Physical. In addition to that, Guru Organic is 1.01 times more volatile than Sprott Physical Platinum. It trades about 0.0 of its total potential returns per unit of risk. Sprott Physical Platinum is currently generating about 0.02 per unit of volatility. If you would invest  1,248  in Sprott Physical Platinum on September 4, 2024 and sell it today you would earn a total of  99.00  from holding Sprott Physical Platinum or generate 7.93% return on investment over 90 days.

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

Guru Organic Energy  vs.  Sprott Physical Platinum

Guru Organic Energy

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Guru Organic Energy has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Guru Organic is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Sprott Physical Platinum

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Sprott Physical Platinum are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Sprott Physical may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Guru Organic and Sprott Physical

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

The idea behind Guru Organic Energy and Sprott Physical Platinum 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.