Correlation Between Sprott Physical and Listed Funds

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

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

Diversification Opportunities for Sprott Physical and Listed Funds

0.35

Correlation Coefficient

Sprott Physical  Listed Funds

Weak diversification

The 3 months correlation between Sprott and Listed is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Sprott Physical Silver and Listed Funds Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Listed Funds Trust and Sprott Physical 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 Physical Silver are associated (or correlated) with Listed Funds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Listed Funds Trust has no effect on the direction of Sprott Physical i.e., Sprott Physical and Listed Funds go up and down completely randomly.

Pair Corralation between Sprott Physical and Listed Funds

Given the investment horizon of 90 days Sprott Physical Silver is expected to generate 3.09 times more return on investment than Listed Funds. However, Sprott Physical is 3.09 times more volatile than Listed Funds Trust. It trades about 0.07 of its potential returns per unit of risk. Listed Funds Trust is currently generating about -0.07 per unit of risk. If you would invest  959.00  in Sprott Physical Silver on September 4, 2024 and sell it today you would earn a total of  73.00  from holding Sprott Physical Silver or generate 7.61% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.44%
Values	Daily Returns

Sprott Physical Silver  vs.  Listed Funds Trust

Sprott Physical Silver

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Sprott Physical Silver are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal essential indicators, Sprott Physical may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Listed Funds Trust

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Listed Funds Trust has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent essential indicators, Listed Funds is not utilizing all of its potentials. The newest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Sprott Physical and Listed Funds

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

The idea behind Sprott Physical Silver and Listed Funds Trust 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.