Correlation Between Sprott Physical and Clairvest

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Can any of the company-specific risk be diversified away by investing in both Sprott Physical and Clairvest 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 Clairvest into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sprott Physical Platinum and Clairvest Group, you can compare the effects of market volatilities on Sprott Physical and Clairvest 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 Clairvest. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sprott Physical and Clairvest.

Diversification Opportunities for Sprott Physical and Clairvest

-0.37
  Correlation Coefficient

Very good diversification

The 3 months correlation between Sprott and Clairvest is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Sprott Physical Platinum and Clairvest Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clairvest Group 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 Platinum are associated (or correlated) with Clairvest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clairvest Group has no effect on the direction of Sprott Physical i.e., Sprott Physical and Clairvest go up and down completely randomly.

Pair Corralation between Sprott Physical and Clairvest

Assuming the 90 days trading horizon Sprott Physical Platinum is expected to generate 1.78 times more return on investment than Clairvest. However, Sprott Physical is 1.78 times more volatile than Clairvest Group. It trades about 0.08 of its potential returns per unit of risk. Clairvest Group is currently generating about 0.03 per unit of risk. If you would invest  1,250  in Sprott Physical Platinum on September 5, 2024 and sell it today you would earn a total of  97.00  from holding Sprott Physical Platinum or generate 7.76% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Sprott Physical Platinum  vs.  Clairvest Group

 Performance 
       Timeline  
Sprott Physical Platinum 

Risk-Adjusted Performance

5 of 100

 
Weak
 
Strong
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in Sprott Physical Platinum are ranked lower than 5 (%) 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.
Clairvest Group 

Risk-Adjusted Performance

2 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in Clairvest Group are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy technical and fundamental indicators, Clairvest is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Sprott Physical and Clairvest Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Sprott Physical and Clairvest

The main advantage of trading using opposite Sprott Physical and Clairvest positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sprott Physical position performs unexpectedly, Clairvest 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 Clairvest will offset losses from the drop in Clairvest's long position.
The idea behind Sprott Physical Platinum and Clairvest Group 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..

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